Michigan Legislature, Governor Reach Deal Averting Shutdown, Allocating Nearly $2B Annual Road Funding

Michigan Gov. Gretchen Whitmer and legislative leaders announced a tentative bipartisan budget agreement meant to be passed and signed before the Oct. 1 deadline to avert a government shutdown. The deal includes the School Aid budget and major new, long-term road funding — reporting on the amount varies, from a BridgeMI estimate of $1.5–$1.8 billion across five years to other outlets saying nearly $2 billion (or an additional $2 billion) per year for roads. To help pay for repairs, the House approved a 24% wholesale marijuana tax projected to raise about $420 million a year, and lawmakers advanced a “decoupling” from recent federal tax changes to phase in credits and avoid an immediate roughly $677 million revenue hit. Leaders also touted measures to lower costs and provide tax relief (including temporarily exempting tips and overtime from state income tax), eliminate some corporate incentive funding, and pursue transparency and anti-waste reforms. Negotiations continue on final details, and the package still must be formally passed by the Legislature and signed by the governor.