Possible Federal Cuts To Medicaid, Education Always On Flood's Mind

(Source: MIRS.news, Published 03/25/2025) State Treasurer Rachael Eubanks and State Budget Office Director Jen Flood said they have been watching the federal government “daily” to see if any changes could hit what the state expects in their 2026 budget.

Speaking at an Institute for Public Policy and Social Research (IPPSR) event on Tuesday, Flood said she has seen proposed federal cuts to nearly $900 million in Medicaid funding and a possible 10 percent removal from education in federal grant funding because of the dismantling of the U.S. Department of Education.

“I can say Medicaid is on my mind every day right now. Michigan is one of the states that actually draws down more federally than a lot of others,” Flood said.

She said the federal government was looking to wrap up reconciliation before Easter, but she didn’t know if or when it would happen.

Federal budget cuts have Michigan's budget directory reflecting daily on the future of Medicaid and education funding.

“Hopefully these changes are out away, so we have some time to figure out how it would impact the state, but we’ve got to start preparing for different scenarios,” she said.

Flood said Gov. Gretchen Whitmer’s current budget still stood because there were no federal changes that had been passed federally. If that happened, it would cause a “recalibration” of the budget, even if it were already passed when the cuts were made.

She said she hasn’t seen a massive correction during the time she’s worked in government.

Were the state to take a massive hit, Flood said the “rainy day” funding was sitting at $2.2 billion, which could do some “temporary patching” of the budget.

“If there’s major ongoing cuts, it would require either reprioritizing existing spending where we have discretion, or doing some one-time patches, but we are always looking with an eye towards fiscal responsibility and sustainability,” she said.

Eubanks said the Treasury hadn’t started the forecasts for the May Consensus Revenue Estimating Conference (CREC), so it was too soon to tell if the models would be upended by threats or implementation of tariffs.

She said the Research Seminar in Quantitative Economics was one of the economic organizations the Treasury talks with. RSQE Director Gabriel Ehrlich said the next forecast study would be released in May, after an update in February.

“We’re monitoring all of the developments at the federal level daily. You know, these details do matter,” Eubanks said.