Michigan Approves $81B Budget, 24% Marijuana Tax

Michigan lawmakers approved an approximately $81 billion state budget after marathon negotiations Oct. 3–4, sending a plan Gov. Gretchen Whitmer is expected to sign that boosts funding for roads and schools while cutting some programs and briefly using a continuation budget to avert a shutdown. A central element is a new 24% wholesale marijuana tax projected to generate about $420 million a year, earmarked for a Neighborhood Road Fund and implementation costs, paired with redirecting corporate income tax revenue. The package replaces the 6% sales tax on gasoline with a 20¢-per-gallon increase and is expected to raise annual road funding by roughly $1.5–$1.8 billion while preserving over $21 billion for education, including universal free school meals. Lawmakers reported budget totals of $75.9 billion after moving some Medicaid provider tax revenue to contingency funds, though overall appropriations are just under $81 billion and represent the first reduction in department appropriations in at least a decade. The measures passed in late-night votes (House general government 101-8, education 104-5; Senate 31-5); Whitmer called it “a darn good budget,” while critics warned the large marijuana levy could push customers to the illicit market and strain the legal cannabis industry.