Capitol News

On Thursday night, Michigan legislative leaders and the Governor announced a tentative agreement on the 2025–26 state budget. The deal comes just days before the October 1 deadline and includes nearly $2 billion in additional annual funding for road projects across the state.

The budget negotiations have centered on several priorities: increasing road funding, reducing government waste, improving efficiency, and protecting programs such as Medicaid. Legislative leaders indicated that while an agreement has been reached on key revenue components, many details of the overall budget remain undisclosed.

The Michigan House passed multiple bills tied to the new budget framework. Among these are tax increases aimed at businesses, including changes known as “decoupling” from federal tax cuts. This measure is expected to raise taxes for Michigan businesses of all sizes and increase their administrative workload.

A statement from the Michigan Chamber of Commerce expressed concern about these changes: "While we are encouraged a government shutdown maybe be avoided, the lack of transparency around key elements of the state budget — including the final topline number — makes it difficult to conduct a true cost-benefit analysis. However, we remain concerned that the revenue pieces — especially the 'decoupling' changes — will negatively impact businesses. Specifically, decoupling from federal tax cuts will result in tax increases for Michigan businesses, including small businesses and employers, and substantially increase the administrative burden on Michal businesses of all sizes. Michigan must remain competitive with other states, especially because the federal tax policy changes were established to make companies in all states more competitive with foreign competitors."

For further information or to read more about their opposition to decoupling measures, readers are directed to contact Randy Gross or review related materials from the Michigan Chamber of Commerce.