CHPS Podcast Episode 6: Analyzing Michigan's Budget Process

In Episode 6 of CHPS of Insight, host Chris White welcomes two members of Clark Hill Public Strategies’ Lansing team — Brad Williams, Director, and Brian O’Connell, Senior Director — for a deep dive into the Michigan state budget process, transportation funding, and the new political dynamics shaping Lansing. Together, they unpack the recent budget negotiations and explore implications for businesses and organizations across the state.

New Faces, New Dynamics in Lansing

The conversation opens with background on the shifting political environment in Michigan’s Capitol. This year’s budget negotiations extended beyond the October 1 deadline, a rare but telling reflection of the new dynamics at play. With Speaker Matt Hall leading a Republican-controlled House and Governor Gretchen Whitmer working alongside a Democratic Senate, the resulting split government created both opportunities and tensions.

O’Connell explains that while divided control is not new in Michigan politics, this session’s slow progress was largely driven by personality clashes and early disputes between chambers. A lawsuit over nine bills left from the prior session set an adversarial tone that persisted throughout the process.

Williams notes that Speaker Hall’s emphasis on budget transparency was a defining feature of this cycle. The new approach provided greater visibility for taxpayers but also added layers of complexity for those working to secure funding.

Balancing Priorities: Roads, Revenues, and Relationships

Among the biggest challenges this year was finding common ground on transportation funding. The latest budget commits roughly $1.85 billion toward roads, a figure short of the initially promised $3.1 billion but still a significant investment in long-term infrastructure.

Williams, drawing on his prior experience with the Michigan Department of Transportation and the Detroit Regional Chamber, underscores that Michigan’s road funding gap stems from decades of underinvestment.

The new budget also introduces a 24% wholesale tax on marijuana sales — imposed at the grower-to-dispensary level — and adjustments to the corporate income tax, both of which have drawn mixed reactions from the business community. Additionally, the state eliminated the SOAR Fund, which had previously supported the Critical Industry Program and Site Readiness Program. While this move disappointed many in the economic development sector, Williams and O’Connell explain that it reflects a broader effort to streamline priorities and reduce earmarks.

A Boost for Transit and Local Investment

Beyond road repair, Michigan’s 2025 budget includes a notable $160 million investment in public transit, with $65 million dedicated to transformational transit projects. These funds will support modernization initiatives across the state, including expansions in metro Detroit aimed at strengthening bus rapid transit and improving commuter reliability.

Williams views this as an important step toward modernizing Michigan’s transportation infrastructure. While the funding level will not fully resolve the state’s long-standing transit challenges, it represents meaningful momentum and signals bipartisan recognition of the need for continued investment.

How the New Process Impacts Michigan Stakeholders

For businesses that rely on state appropriations, the changes in Lansing’s budget process carry significant implications. O’Connell notes that the new transparency requirements reduced the number of legislative earmarks from nearly $1 billion at the height of federal stimulus years to roughly $200 million this cycle.

As a result, even long-standing budget recipients, such as health, education, and community programs, were required to justify their funding and demonstrate measurable public value. While the process is more rigorous, it also provides greater visibility into the positive outcomes of publicly funded initiatives.

Key programs connected to the Department of Health and Human Services, higher education, and school safety saw both cuts and targeted boosts, including support for security technologies in schools. These shifts highlight the need for close coordination between clients and their government affairs advisors to understand how line items, boilerplate provisions, and agency policies may affect their operations.

Preparing for What’s Next: Early Strategy Is Key

Williams emphasizes that budget work for next year is already underway. Even before the ink was dry on this year’s agreement, discussions began about priorities for the next cycle. Success in Lansing now requires more than a compelling story: it demands an early, deliberate strategy.

That approach includes building relationships with key state departments, the executive office, and legislators on both sides of the aisle. O’Connell adds that Clark Hill Public Strategies’ bipartisan team is well-positioned to help clients identify funding opportunities in Michigan’s evolving budget.

“We’re a bipartisan group with deep relationships across the governor’s office, state agencies, and the legislature,” O’Connell says. “Our team works on both sides of the aisle because that’s what it takes to get things done.”

CHPS of Insight will continue to deliver expert commentary and timely updates on the trade and policy developments shaping today’s global economy.

 

This publication is intended for general informational purposes only and does not constitute legal advice or a solicitation to provide legal services. The information in this publication is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional legal counsel. The views and opinions expressed herein represent those of the individual author only and are not necessarily the views of Clark Hill PLC. Although we attempt to ensure that postings on our website are complete, accurate, and up to date, we assume no responsibility for their completeness, accuracy, or timeliness.