(LANSING) - Michigan officials are projecting a one-point-one billion dollar revenue shortfall for the 2026-27 fiscal year, according to the state's Consensus Revenue Estimating Conference.
State Budget Director Jen Flood said changes to state and federal tax laws, along with a recently approved two-billion-dollar road repair plan, are the main reasons for the decline.
Officials reduced General Fund revenue estimates by 981 million dollars. They project a 201 million dollar increase for the School Aid Fund, resulting in a combined 1.1 billion dollar drop in expected revenue. The fiscal year begins October 1, 2026.
Republican leaders are urging immediate spending cuts.
House Speaker Matt Hall called for cutting roughly 1.3 billion dollars from the next spending plan, citing what he described as wasteful spending and "ghost jobs."
Democratic leaders and state officials emphasized economic stability.
State Senator Sarah Anthony, chair of the Senate Appropriations Committee, said careful fiscal planning will allow the state to maintain a responsible budget. State Treasurer Rachael Eubanks described Michigan's economic outlook as stable despite federal uncertainty.
The forecast formally begins Michigan's annual budget process. Governor Gretchen Whitmer is expected to release her executive budget proposal in February, with lawmakers working toward a final agreement before the new fiscal year starts.