103rd Legislature, March-October 2025: We (Finally) Have a Budget

I hadn't planned to lump six months of legislative activity into a single article but hey, better late than never right? Times have been busy, folks 😅

The usual disclaimer applies: This article was written on my own time. Coverage of legislative activity on this blog represents my independent views and analysis unless otherwise noted.

You may also be interested in last year's budget breakdown and lame duck recap .

MDOT calculated $270M as the approximate "hold harmless" figure for Michigan's transit providers in light of inflation and rising operational costs from insurance coverage and higher driver wages. This budget and its provisions ensure we can stave off any potential cuts to our core local bus services in the coming years.

Now that we have multi-year, seemingly stable support for current operations with no reliance on rescue funds, our Appropriations subcommittees can finally stop focusing on crisis aversion and start planning for real investment. I'm excited for next year's conversations.

While our state legislature absolutely has the right to hold the providers of taxpayer-funded services accountable, the suggestion that FRR should determine whether operations funds are withheld demonstrated a fundamental misunderstanding of how our public transit agencies operate. It implied an expectation that transit must strive to turn a profit rather than the true goal: Enabling independent living and maximizing access to opportunity for as many Michiganders as possible.

According to 2023 National Transit Database data , only a few urban agencies in Michigan would have been eligible to access this increase in funds: MTA (Flint), KMetro (Kalamazoo), The Rapid (Grand Rapids), CATA (Lansing), and JATA (Jackson). Depending on exact calculation inputs, TheRide (Ann Arbor) and STARS (Saginaw) would have toed the line. All other agencies are well below this cutoff by design as they operate primarily coverage-focused networks designed to serve a community need. For these agencies, the House budget proposal would've effectively been a major funding cut that resulted in service reductions.

There's nothing wrong at all with incentivizing the construction of ridership-oriented projects, such as high-capacity BRT corridors which have more potential for revenue generation. But these must be incentives for accessing additional funds, not conditions tied to the existing state subsidy that our agencies use just to keep the lights on. The final budget deal handled this the correct way.

An incredibly oversimplified explanation of MDOT's annual budget, as regulated by Act 51:

• The primary source of funding is the Michigan Transportation Fund (MTF). Up to a statutory maximum of 10% of this fund may be distributed to the CTF each year.
• The CTF itself has two primary revenue sources: The MTF and certain revenue from the General Sales Tax Act (the "auto-related sales tax"), which was modified by this funding package. Typically, about two-thirds of this fund goes toward LBO, though this has varied year to year. 10% of the CTF is legislatively earmarked for passenger and freight services, and a portion of the fund also supports transit capital.

The Transportation Funding Package gets us very close to that 10% ceiling in FY2025-26: $160M of the $1.8B package has been earmarked specifically for transit enhancements.

While we can expect the majority of the additional CTF dollars to be directed into LBO, some of this extra $35M / $52.5M yearly could also be used to subsidize Indian Trails expansion. A few million goes a long way – even just additional non-stop trips between city pairs would be a game changer. (Return of PM eastbound service out of Grand Rapids? I want my bus back , Trails!)

It's time to dream big. Similar to last year's Transformational Projects Authority proposal, the criteria for the MDOT fund highlight "high-capacity" modes of travel, which suggests rail and BRT. While this package is much smaller than last year's SOAR reform package promising $2 billion over 10 years, it's still substantial, and it's cleaner: It's no longer attached to funding failed corporate subsidy in a time of economic uncertainty.

We now have $325M in state funds over the next five years which agencies will be able to apply for, with the first project selections to be reported by December 31, 2026. This may finally be our ticket to access new federal Capital Investment Grants for full buildout of BRT corridors. Grand Rapids was first, but they need not be the last!

Some project reference points as food for thought:

• The Grand Rapids Laker Line reached a final cost of $72.8M (close to $90M adjusted for inflation) at an 80/20 split between CIG dollars and an MDOT match.
• Madison, Wisconsin's East-West BRT reached an approximate cost of $190M, with $110.6M covered in federal grants.
• The recently constructed IndyGo Purple Line reached a final cost of $188M with a 50% federal match.
• Beyond the Midwest, Seattle's RapidRide G Line reached an approximate cost of $144M, with $80M covered in federal grants.

As for rail, keep in mind: Frequency improvements on the Blue Water, Wolverine, and Pere Marquette already have Corridor ID funds locked in. The Detroit to Grand Rapids corridor study and the North-South Passenger Rail project are also both on track for upcoming grants, and the Midwest Interstate Passenger Rail Commission is pursuing additional federal funding which was just announced.

Think NEW services, and think regional. All-day trains between Detroit and Ann Arbor? How about Detroit to Saginaw, with the infrastructure work in Holly needed to make it possible? That's where I'd look first.

I'm cheering along with everyone else at the news of this historic investment in new public transit projects! That said, we do have to address the elephant in the room: The process that got us here.

It's no secret that this year's budget reconciliation "process" was more of a budget reconciliation cluster. There isn't even a consensus on whether the four-hour gap between the end of the fiscal year and Governor Whitmer's signing of a weeklong Continuing Resolution at 4:18am on October 1st actually constituted a state government shutdown .

On the latest episode of Off the Record (~13:42 to 17:20), several members of the Capitol press corps discussed the ramifications of the precedent which would've been set had state government continued to operate with no approved budget.

We really avoided something that could've been precedent-setting or problematic [...] And they were sitting there, staring at the idea that we're just going to keep the government open, without a budget, with the governor deciding. Think about in the future if there's a Republican legislature, Democratic governor, or vice versa, and the governor says, 'I'll veto your budget, and because of what happened in 2025, I'm just keeping the government going on what I want to do.'"

— Zoe Clark of Michigan Public and Craig Mauger of The Detroit News

We almost walked ourselves into a very serious precedent-setting issue that we managed to somehow cartwheel our way out of at the 13th hour with a stopgap bill.

— Jordyn Hermani, Bridge Michigan

Beyond that, there's the issue of transparency. Most legislative staffers and lobbyists, let alone members of the general public, did not have a clear picture of this budget until after it had been sent to Governor Whitmer's desk. The extra $160M was added to the transportation package well after its first iteration received a subcommittee hearing in March as a last-minute, seemingly overnight deal. Again, super happy it happened – just would've liked the opportunity to be in the room when it did!

Things aren't about to get prettier, either. This same divided legislature will have to produce another budget in 2026 – hopefully before June 30th this time – with every seat in the House and Senate on the ballot as well as the race for Governor Whitmer's successor. Everything will be on the line for every elected at the negotiating table, so... strap in. It's gonna get bumpy.

This year, all proposed supplemental earmarks – whether approved or not – were made public online for the first time. $120M was awarded from the General Fund to 98 total projects. For now, records are only searchable by date and legislator name, but with a little patience (and scripting) I was able to identify the projects above.

Legislatively Directed Spending Items: Michigan House

Legislatively Directed Spending Items: Michigan Senate