CRC Flags Budget Shortfall That State Says Doesn't Exist

(Source: MIRS.news, Published 07/22/2026) The Citizens Research Council of Michigan said the signed Fiscal Year (FY) 2027 budget is between $600 million to $900 million short of actual state funding, but the state says there are lapses that will return the shortfall this year to make it balance.

CRC Senior Research Associate Bob Schneider said they found a $672 million gap between the FY 2027 appropriations against the revenues being gathered for the fiscal year, but he also said the problem they found wasn’t automatically a problem, because there were items that could close that gap that were not apparent.

“There’s been no release of public information about ‘We have this issue, and here’s how we’re going to address it. Some likely solutions could be the Strategic Outreach and Attraction Reserve (SOAR) Fund,” Schneider said.

He said there is close to $500 million in the SOAR balance that, if it lapses, would close the shortfall.

He also said there was stimulus fiscal recovery funding that would be able to be moved into the Department of Corrections (DOC) and Michigan State Police (MSP) that would then be able to free up other funding.

He also said there could be a supplemental on the way that would more than make up for the shortfall, which happened with the 2026 budget.

Schneider said the boilerplate funding present in the budget doesn’t have any bearing on the shortfall either, but did say the state needs to be more transparent with what they are doing with the budget.

Michigan Department of Technology, Management and Budget spokesperson Cole Pachucki said Michigan law requires a balanced budget and that Gov. Gretchen Whitmer has passed one every year.

“Any implications that the budget is not balanced are simply false,” Pachucki said.

He said the budget was using unspent COVID contingency funding and the lapse in uncommitted SOAR funding to balance the FY ’27 budget.

Whitmer also said on Tuesday that she had to get back with the reporters who asked about the shortfall and that she had signed a balanced budget.

“I don’t want to do anyone wrong by opining without actually getting the information myself,” Whitmer said.