Budget Stare-Down Has Education Community Getting Antsy

(Source: MIRS.news, Published 06/09/2026) The State Board of Education and several education leaders sounded the alarm about the possibility that the governor and the Legislature won't reach an agreement on the Fiscal Year (FY) 2027 budget by July 1.

Behind the scenes, budget talks between the Republican speaker of the House and the Democratic governor are gummed up, even though subcommittee chairs are ready to go with their individual department budgets.

At the core of the issue is the federal government scaling back the ability for states to use special health care assessments to draw down more Medicaid funding. The governor's office is pushing for long-term revenue replacement or at least a battle plan on how to replace hundreds of millions of dollars as opposed to kicking people off their health care.

Speaker Matt Hall (R-Richland Township) is reading this request as a demand for more revenue, which he's only going to do if property tax cuts are put on the table. His caucus has a massive property tax proposal he wouldn't mind getting some oxygen.

So, while these two allies from the FY 2026 budget season are in a stare-down over the '27 budget, education leaders are tapping their feet and looking at their watches.

Typically, election-year budgets are completed by July 1, so incumbents don't have to answer uncomfortable questions on the campaign trail about why the budget isn't done. MIRS has learned Hall doesn't want to pass a budget after July 1, but he also doesn't want to bend on what could be described by his members' primary opponents as a “tax hike.” The education lobby had heard the completion date of June 18, but one sources tells MIRS that date isn't realistic. The week of June 29 is looking more likely

Most education boards and local governments start their fiscal years on July 1. They argue it's difficult to plan when the state isn't clear on how much money it's giving locals.

To that end, the State Board of Education passed a resolution and school leaders' associations sent a letter to Gov. Gretchen Whitmer, Senate Leader Winnie Brinks (D-Grand Rapids) and House Speaker Matt Hall (R-Richland Township) calling for them to pass the School Aid Budget by July 1.

The Michigan Association of Superintendents and Administrators and the Michigan Association of School Boards sent a joint letter telling the state government leaders that they didn’t want to see a failure to pass the budget as happened in 2025 when the statutory July 1 deadline was missed by 95 days.

"The delay that we had last year was so detrimental to our schools and staff," laments Michigan Association of School Board (MASB) Director of Government Relations Jennifer Smith. She reported, "We're not getting a lot of information. The closer we get to June 30, the less information we're getting."

The letter stated what the two school associations would like to see in the budget, which included a weighted funding model that was incorporated in the budget and introduced by Whitmer and the Senate.

The groups also said the schools in the state were underfunded and there was a proposal that would cost about $400 million out of the School Aid Fund.

The letter acknowledges that lawmakers are also working on a number of issues, including property tax relief and a revamping of how board members are selected at the state's three major universities, but Don Wotruba and Dr. Tina Kerr ask everyone to adopt the K-12 budget first because they don't want their member's spending plans "held hostage to unrelated policy priorities."

House K-12 Appropriations Subcommittee Chair Tim Kelly (R-Saginaw) advised the schools to begin the budget writing process now based -- regardless of the July 1 deadline – on the schools getting $10,300 in the foundation per pupil allowance.

“I always tell them that it's not going below $10,300, so start building the budget around that," Kelly said.

Smith argued they can't.

"We don't know what we're getting for At-Risk students. We don't know what we are getting for school safety and for special education (and) if we can't set budgets, we can't set staffing, we can't get programs, it makes for a chaotic summer" for the districts.

Given that he thinks they can do the budget regardless of that, Kelly was asked if the angst in the education lobby was a political false alarm?

“Oh my God," Kelly said. "Heaven forbid that the K-12 Alliance doesn't put out a false alarm. You're going to get your money . . . calm down."

Kelly and Senate K-12 Appropriations Subcommittee Chair Darrin Camilleri (D-Trenton) have had a couple of conversations, but their give and take has yet to begin.

“There's still some rules of engagement, rules of the road that I abide by. We're waiting for leadership to sort some of this stuff out and figure out what to do to engage,” he said.

Asked if he could assure the education lobby the deadline would be met he said, "We're certainly working to do what we can."

Smith, on the other hand, noted, "the clock is ticking. We have 21 days."

In related news, the State Board of Education also voted unanimously to send a resolution to the Legislature and Whitmer that asked for the budget to be passed on time.