The Michigan Supreme Court closed out July with a series of rulings impacting regulators, energy developers, and businesses well into the fall session. The highest-profile decision was July 31, when the Court vacated a key state permit for Enbridge's Line 5 pipeline tunnel under the Straits of Mackinac. The ruling found the Michigan Public Service Commission's 2023 review too narrow, faulting regulators for not adequately weighing the tunnel's environmental impact or the project's implications for the Great Lakes public trust doctrine. Days earlier, in Attorney General v. Eli Lilly and Co., the Court ruled 4-3 to reopen Attorney General Dana Nessel's investigation into insulin pricing by overturning two prior rulings that had narrowly shielded regulated businesses from certain state investigations. In People v. Langston, the justices narrowed life without parole sentencing, ruling that mandatory life sentences for pre-1980 felony-murder convictions can violate constitutional protections against cruel or unusual punishment, if the defendant's intent was never proven at trial. In a 6-1 decision in People v. Madison, the Court revived the "diminished capacity" defense — evidence that a defendant's mental illness or intellectual disability undercut the specific intent required for a crime, which is distinct from a full legal-insanity defense. The decision overturns the Court's 2001 ruling in People v. Carpenter, which required defendants to meet an all-or-nothing legal-insanity standard to raise mental health at trial.

Three federal funding streams — Medicaid, Housing and Urban Development housing assistance, and federal crime-victim funding — are all being reduced at the same time and Michigan’s budget can only absorb so much of the difference. The 2025 federal reconciliation law (the One Big Beautiful Bill Act) cuts federal Medicaid spending by some $911 billion nationally over 10 years. Michigan — where Medicaid covers over 2.5 million residents — is projected to lose $2 to $4 billion annually once the law is fully phased in, with more than 200,000 residents at risk of losing coverage. HUD's Emergency Housing Voucher program, which houses individuals fleeing violence and homelessness, is expected to run out of money by mid-2026. Michigan's federal Victims of Crime Act award has dropped from over $100 million in 2018 to under $23 million in 2024, with providers bracing for about 40% in additional cuts this year. The state's FY26 budget added $30 million recurring plus a one-time $5 million — but that’s still considerably short of the estimated $75 million gap.

Lawmakers are expected to focus on these key issues this fall: 

• House Republicans have prioritized broad property tax relief, lower utility costs and housing affordability, while Senate Democrats are focused on targeted tax relief, health care affordability, and protections for working families. 
• Energy policy centering around rising utility bills, electric grid reliability, and implementation of Michigan’s clean energy laws. 
• Hospital pricing transparency, medical debt, prescription drug costs and consumer protections.
• Reading proficiency, career and technical education, teacher recruitment and workforce development.
• Senate Democrats have prioritized government transparency, including expanding the Freedom of Information Act to cover the Legislature and governor’s office. 
• A bipartisan proposal to move Michigan’s primary election from August to May. 
• Housing affordability discussions around zoning, development incentives and first-time homeownership.

For complete details, please click here for the August 2026 Karoub Report.