Legislative Report - July 2025

The Michigan House and Senate have rolled past their self-imposed July 1 deadline to agree on a budget for the 2025-6 fiscal year that begins on October 1.  The current plan is for key legislative leaders to continue to negotiate over the School Aid Budget and the Omnibus Budget over the summer, but the general consensus in Lansing is that an agreement will not likely be reached until September.  There is a serious concern about a possible government shutdown if the Michigan Legislature fails to reach a deal by October 1. 
 
Meanwhile, the ongoing saga relating to a number of bills from last session that have yet to be presented to Governor Whitmer continues.  Despite a ruling in the Michigan Court of Claims declaring that Michigan Speaker of the House must present bills passed last session to the Governor for her signature, the Michigan House has continued to refuse to comply.  That legal case is ongoing. 
 
More on these issues, and others, below.
 
 
House Continues to Refuse to Obey Court Rulings and Michigan Constitution
 
Taking pages from the federal executive branch, the Michigan House has refused to transmit 9 bills to the Governor for her signature despite the fact that these bills were passed by both the House and Senate last December.  Judge Sima Patel issued a ruling in February that made it clear the House could not refuse to transmit legislation that had been passed by both chambers.  Nonetheless, Speaker Matt Hall chose to ignore that ruling.  The House has appealed the verdict to the Michigan Court of Appeals.
 
Of the nine bills stuck in limbo, two packages are very important to state workers.  House Bill 6058 would amend PA 152 – the so-called “80/20” law.  The bill would change PA 152 so that public employers would be required to pay at least 80% of health care costs for their employees.  This reverses the current statute that requires public employees to pay no less than 20% of their health care costs.  The current law interferes with employees’ right to collectively bargain their wages and benefits and burdens them with sharp health care benefit cost increases. 
 
The other bill package being delayed consists of HB 4665-4667 that would provide law-enforcement-related state workers an option to join the Michigan State Police Retirement System – a vast improvement over the current state employee defined contribution plan.   Those bills have been touted as a way to address critical staffing shortages in the Michigan Corrections Department – as well as other departments – as employees leave state employment to take similar jobs in municipalities that offer better retirement benefits. 
 
A rally led by the Service Employees International Union and its affiliate the Michigan Corrections Organization took place at the capitol earlier this year.  Activists called upon Speaker Hall to obey the court and Michigan Constitution and finally transmit the bills to the Governor.  Unfortunately, it appears that House leaders are willing to drag this out as long as they can, and it is likely that the Supreme Court might end up making the final decision in the matter.  Of course, that assumes that the House will not refuse an order even from Michigan’s highest court – something that until very recently would have been unthinkable. 
 
 
Reintroduction of MPSERS and SERS Bills in Process
 
Efforts are underway to redraft legislation that failed to pass last year regarding state employee and public school employee retirement benefits.  Representative Matt Koleszar (D-Plymouth) and Representative Regina Weiss (D-Oak Park) introduced bills last year – HB 6060 and 6061 – that sought to improve retirement benefits for both  state employees and public school employees.    
 
House Bill 6061 focused on state workers, and sought to give state employees an option to join a hybrid pension plan significantly similar to the Pension Plus 2 currently available to public school employees.  The overall goal of both bills was to give public school and state workers a better retirement option than the anemic defined contribution plans they are currently in.  Both bills passed the House in the Lame Duck session, but failed to move in the Senate. 
 
We are waiting for drafts to be prepared by the Legislative Service Bureau.  In the meantime, we are attempting to identify possible Republican sponsors or co-sponsors to broaden the partisan appeal of the legislation.   
 
 
Road Funding Takes Center Stage in Budget Talks
 
In February, Governor Whitmer presented her annual budget proposal.  The document laid out a plan to spend approximately $80 billion in the 2025-6 fiscal year.  While the proposal contained a few enhancements and increases to some of her signature programs such as Michigan Reconnect and free school lunches, it was what many longtime observers would call a “continuation” budget.  Most programs were adjusted for inflation and caseload adjustments and it overall reflected the modest increase in tax revenues that had been projected back in January’s Revenue Estimating Conference.  Unfortunately, the May Revenue Estimating Conference – taking into account the negative economic effects of the first few months of this year – took a dimmer view of next year’s estimates for state revenue.  Moreover, recent passage of federal tax and spending legislation have created even more uncertainty for Michigan’s revenue forecasts.  It is highly likely that the Legislature will need to reduce spending levels recommended by Governor Whitmer, and potentially adopt across the board budget cuts. 
 
This has put major damper on efforts in the Michigan House to shift funds from existing programs into road and bridge funding.  Although the House has yet to publicly release a budget proposal, House leaders have indicated all year their intention to cut several billion from current state spending so that it could be dedicated instead to road projects.  Many of those cuts now might be necessary just to fill gaps in falling state revenues and potential federal funding reductions. 
 
This has made even more complicated the already contentious relationship between the Republican-led House and the Democratic-led Senate.  Governor Whitmer has worked with Republican House leaders in an effort to find a compromise on a road package, with House Republicans looking to raise $3 billion from budget cuts in other departments, and Governor Whitmer proposing new taxes to fill that gap.  The Senate, meanwhile, passed a budget proposal that mostly follows the Governor’s lead, but has yet to jump on the “make roads the sole priority” bandwagon.  Somehow these three differing budget philosophies will have to come together by September 30 or else the state will have a government shutdown starting October 1.