Plan cuts spending, avoids tax increases, and prioritizes services people rely on

State Rep. Ann Bollin, chair of the House Appropriations Committee, today led the House in approving a $75.8 billion state budget plan focused on easing the financial strain on Michigan families by holding the line on taxes, cutting wasteful spending, and using the savings to prioritize the services people rely on most.

The House-approved budget reduces the overall state budget by $106 million and state general fund spending by nearly $600 million, avoids dipping into the state’s rainy-day fund, and stands up for Michigan families by rejecting tax and fee increases proposed by the governor.

“Right now, families are stretching every dollar just to keep up,” Bollin said. “They expect their government to be just as careful with their money. This budget reflects that by focusing on what truly matters. We took a responsible approach that covers every priority while reining in state government to ensure that taxpayers aren’t asked to pay more just to sustain the massive growth of state government we’ve seen over the last eight years.”

A key component of the House plan is a shift toward more accurate budgeting practices. Instead of automatically increasing funding year after year, the plan aligns appropriations with real spending levels from recent years.

“For years, Lansing has budgeted based on inflated assumptions instead of actual need,” Bollin said. “We’re putting an end to that practice by grounding this budget in reality, restoring transparency, and making sure every dollar has a purpose.”

A review of actual spending across state government revealed nearly half of all budget line items were overfunded, totaling close to $2 billion in excess. By right-sizing the budget to reflect what is truly spent, the House was able to eliminate waste, meet funding needs, and avoid new taxes.

“This is what responsible governing looks like,” Bollin said. “It’s not about spending more. It’s about spending smarter. It’s about setting priorities and sticking to them. It’s a real budget – funded with real dollars, providing real results for the people across Michigan.

Bollin emphasized that the plan protects essential services.

“This budget fully supports the services people depend on, from public safety and schools to Medicaid and veterans’ programs,” Bollin said. “By cutting waste and prioritizing wisely, we’re delivering a budget that fully funds all of our priorities without shortchanging the people of Michigan.”

Bollin said highlights of the House budget include:

• Boosting road funding: After last year’s bipartisan agreement added more than $2 billion in ongoing road funding, the House budget adds another $100 million to continue addressing Michigan’s road funding gap.
• Protecting and strengthening Medicaid: The House budget increases Medicaid funding by $1.2 billion to meet growing caseloads, while investing in anti-fraud efforts and implementing work requirements to ensure long-term sustainability.
• Eliminating ghost employees: Building on last year’s bipartisan effort that removed more than 2,000 vacant positions, the House plan eliminates an additional 3,300 “ghost” positions – roles that are funded but not filled. The budget maintains a 2,600 FTE cushion to ensure departments can meet staffing needs and cover overtime, particularly for public safety roles like state police and corrections officers. The budget also includes a $50 million investment to hire additional investigators within the Department of Health and Human Services to crack down on fraud in Medicaid and the SNAP food assistance program.
• Record school funding: The plan provides a $250 per-pupil increase, bringing the foundation allowance to $10,300, while continuing universal school meals and school resource officers.
• Supporting public safety and communities: The plan includes an additional $10 million for the Public Safety Trust Fund, a $65 million increase in revenue sharing for local governments, and funding for an additional youth mental health treatment facility.
• Strengthening workforce development: Increased investment in the Going PRO Talent Fund will expand support for small businesses and workforce training programs.
• Supporting rural communities: The budget continues investments in agriculture programs and other services for rural communities, including MSU Extension and MSU AgBioResearch, Michigan Agriculture Environmental Assurance, Michigan Animal Agriculture Alliance, soil conservation districts, and county fairs.
• Energy cost transparency: It requires the Michigan Public Service Commission to provide clear explanations to the Legislature when approving utility rate increases, helping address rising energy costs for families.
• Boosting the rainy-day fund: The House makes a $300 million deposit to strengthen Michigan’s financial stability and ensure the state is better prepared for economic downturns or unexpected emergencies without turning to tax increases.
• Reining in IT spending: The plan addresses out-of-control spending on state IT projects by consolidating oversight into a new dedicated office, improving accountability and ensuring the systems we spend tax dollars on actually work for residents.

Bollin said the House vote marks an important step toward delivering a final, responsible budget for Michigan.

“We’ve done our job in the House by passing a budget that is honest, sustainable, and focused on the people we serve,” Bollin said. “Now it’s time to work with the Senate and the governor to get this across the finish line and deliver results that benefit Michigan families.”