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What’s happening: The Michigan House passed a $54 billion budget for FY26 — $6 billion less than the Senate’s version, $5 billion below the Governor’s proposal and $3 billion under the current state budget.
Why it matters: This budget marks a major shift in priorities, with significant cuts to departments and programs that impact employers, local governments and service providers.
- Some reductions come from the implementation of the federal "One Big Beautiful Bill" (OB3); others from a 10% trim in operations.
- Key programs like the Going PRO Talent Fund and other workforce development initiatives face uncertainty as negotiations continue.
- Local governments and school districts — many of which began their fiscal year July 1 — lack clear direction, making planning difficult.
The bigger picture: While the House budget is leaner, it includes notable investments in roads and public safety and eliminates state taxes on Social Security income.
- It also includes cuts to state departments and identified over $2 billion in cuts from outdated or expired programs.
What’s next: With just 34 days before the looming Oct. 1 constitutional deadline and big differences in funding levels and policy between the three budgets, negotiations between the House, Senate and Governor will be critical.
- Without a deal, Michigan faces a government shutdown.
What we’re doing: The MI Chamber is actively engaged to ensure the final budget supports economic growth, workforce development and a competitive business climate.
Go deeper: Read more from the Michigan Chamber of Commerce on the House budget proposal and what more it entails.
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