LANSING, Mich. (WZMQ) – Gov. Gretchen Whitmer signed her eighth and final state budget Tuesday, along with a separate set of bills meant to build more housing across Michigan, as she enters her last six months as governor.
The state says the fiscal year 2027 budget adds up to $75.2 billion. Outside researchers put the real number closer to $86.4 billion once certain federal dollars are factored in. The plan keeps free breakfast and lunch for every public school student in Michigan, raises per-pupil school funding to a record $10,300, and continues tax breaks for working families and seniors. It also adds $343 million for local roads and new funding tied to federal changes affecting Medicaid and food assistance.
“At a time when Michiganders are struggling with higher costs, this budget puts money in their pockets,” Whitmer said. “It continues free breakfast and lunch for all 1.4 million public school students, cuts taxes, fixes the damn roads.”
What it means for Upper Peninsula schools
For U.P. districts, the budget puts $125 million toward student transportation and boosts career and technical education funding by $4 million, a 10% increase.
Rep. Karl Bohnak, R-Deerton, said the transportation dollars address a problem unique to rural Michigan. “School transportation isn’t a luxury in the Upper Peninsula, it’s a necessity,” Bohnak said. “Many of our students travel long distances every day just to get to school.”
The budget also puts more than $228 million toward reading programs statewide, including teacher training and literacy coaches, plus $185 million to help schools recruit and keep teachers and $46 million for career and technical education.
Rep. Ann Bollin, R-Brighton Township, who chairs the House Appropriations Committee, said lawmakers tried to balance new spending against fiscal caution. “We’re investing in early learning, proven instructional strategies, and additional support for students who need extra help, while giving schools greater stability and predictability as they plan for the future,” Bollin said.
A separate push on housing
Alongside the budget, Whitmer signed bills meant to make it cheaper to build homes in Michigan. One creates a new state tax credit that pairs with an existing federal credit, which officials say could help fund about 2,500 new affordable housing units a year.
“This bill package also will nearly double the state’s ongoing investments in affordable housing and will join over 30 other states, red and blue, with similar programs,” Whitmer said.
Another bill loosens a building rule, letting certain apartment buildings up to four stories be built with one staircase instead of two, as long as they meet stricter fire-safety requirements. The state estimates that could cut construction costs on new apartment buildings by about 10%.
“These common sense changes will cut construction costs for new apartment buildings by 10%,” Whitmer said.
Rep. Parker Fairbairn, R-Harbor Springs, who sponsored that bill, said it’s a partial fix, not a cure-all. “It isn’t a silver bullet, but it is one more tool that communities can put in their housing toolbox,” Fairbairn said.
Bohnak also sponsored a separate bill barring investment firms from owning more than 100 single-family homes anywhere in Michigan.
Senate Majority Leader Winnie Brinks, D-Grand Rapids, said housing costs come up constantly in conversations with the people she represents. “Throughout my time in the Capitol, one issue has remained top of mind for so many of my constituents here in Grand Rapids, and folks all over the state: the housing crisis, and it’s a real problem,” Brinks said.
Questions about the budget’s balance
Just a day after the signings, the nonpartisan Citizens Research Council of Michigan released a report saying the budget could run between $600 million and $900 million short of what the state actually has available, including a possible $672 million gap in the 2027 budget alone.
“Right now, the biggest concern from my standpoint is we’re not sure what the path is, and it could involve significant changes to appropriated dollars,” said Bob Schneider, the council’s senior research associate for state affairs.
State officials pushed back hard on that conclusion. “Any implications that the budget is not balanced are simply false,” a spokesperson for the state budget office said. “Michigan law requires a balanced budget, and Governor Whitmer has signed a balanced budget every year of this administration, including this one.”
Whitmer said after the housing signing that she believed the budget was balanced, though she hadn’t yet seen the council’s report at that point.
Much of the disagreement comes down to how the state counts its own spending. The $75.2 billion figure leaves out $9.2 billion tied to two Medicaid provider taxes that lawmakers shifted into a separate section of the budget rather than the main total. House Speaker Matt Hall blamed the gap on “federal spending that we have no say in and no control over,” and said this year’s budget is still smaller than last year’s regardless of how it’s counted.
The council also flagged a longer-term cost heading into next year: an estimated $320 million the state will need to help cover food assistance administration once a federal law shifts more of that expense onto states starting in 2028.
Closing out two terms
The budget and housing bills are among the last major items Whitmer will sign before leaving office. Senate Appropriations Chair Sarah Anthony, D-Lansing, who led the Senate’s side of the negotiations, said the plan reflects the pressures families are facing right now.
“As the Senate’s lead budget negotiator, I’m incredibly proud to have championed a fourth state budget that responds to the pressing challenges that people and communities are facing across the state,” Anthony said.
None of it takes effect until Michigan’s new fiscal year begins Oct. 1.
