With Governor Gretchen Whitmer’s budget proposal fully absorbed, the Michigan House and Senate appropriations subcommittees are working through departmental budgets line by line. Both chambers are working toward late April and early May as key inflection points. In the coming weeks, it’s anticipated that the House and Senate subcommittees will assemble and advance budget recommendations, with full committee action to follow. Both chambers are expressing concerns that this will be a tighter budget than in recent years. Michigan does not face an immediate shortfall. However, the mixture of ongoing obligations, federal uncertainty, and cautious revenue projections is causing the Legislature to take a more restrained position.
In May, the Consensus Revenue Estimating Conference (CREC) will lay out the updated revenue picture that ultimately determines how much flexibility lawmakers have to finalize the FY27 budget. While the January conference set the baseline, May is when adjustments are made, which can meaningfully shift the trajectory of negotiations. Uncertainty continues to be the defining theme with mixed economic signals. While Michigan has remained relatively stable, there are ongoing questions about consumer spending, federal policy impacts, and broader economic headwinds.
Key differences in their tone and approach to budgetary matters are becoming more apparent in the House and Senate. The House has taken a more granular, member-driven approach, with subcommittees focused on specific programmatic questions and being willing to revisit assumptions included in the Governor’s budget proposal. The House is emphasizing oversight, cost justification, and making certain new investments have clear outcomes. The Senate is taking a more streamlined approach, with leaders communicating priorities early on and keeping up a stable trajectory through the hearing process. The Senate focus is continuity — building on previous investments while supporting a defined set of policy goals.
Developments in Washington D.C. continue to have ripple effects on Michigan’s budget that could influence policy and funding decisions in the state. Some key concerns surround work requirements which are tied to federal programs, possible adjustments to workforce funding streams, and continuing healthcare policy talks. Even if changes are not immediate, the direction federal policy takes can shape state-level planning — especially when Michigan relies on federal matching funds or program flexibility. Proposals impacting Workforce Innovation and Opportunity Act (WIOA) funding, Medicaid structures, or SNAP requirements could change demand for services at the local level, placing more strain on state systems and partners. Concurrently, federal uncertainty often reinforces the need for state-level stability.
Click here for full details inside the April 2026 Karoub Report.
