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Michigan faces economic challenges as it navigates the complexities of its budget season, with potential impacts from tariffs and a softening economy. These factors are being carefully evaluated as state legislators work to finalize the budget.
The Consensus Revenue Estimating Conference (CREC) is currently convening at the State Capitol, tasked with determining the financial resources available for the upcoming fiscal year. This gathering involves the executive branch and legislative chambers collaborating to analyze economic data and forecasts to reach a consensus on budget numbers.
However, this year presents unique challenges, with questions arising around the influence of tariffs on Michigan’s economy and tax revenues. A presentation from the University of Michigan’s Research Seminar in Quantitative Economics highlights the situation:
“Michigan’s labor market has lost momentum relative to the nation’s since early last year. The state’s unemployment rate has climbed more steeply than the U.S. rate, while local job growth has also slowed more meaningfully. Against this concerning backdrop, Michigan now faces the dual challenges of a new and unsettled tariff regime and weaker national growth prospects.”
Both the state House and Senate fiscal agencies anticipate that economic slowdowns will result in less budgetary flexibility than initially expected at the beginning of the year.
Adding to the complexity, House Speaker Matt Hall (R-Richland Twp.) has expressed a willingness to extend budget discussions beyond the July 1st statutory deadline, which is critical for school districts, colleges, universities, and local governments whose fiscal years start on that date. While there’s no penalty for missing the deadline, the Michigan Constitution mandates a balanced budget by the fiscal year’s start on October 1st.
Less financial leeway aligns with Hall’s stance, shared by many progressive Democrats, against Governor Gretchen Whitmer’s business incentives in the current budget. These fiscal headwinds might support Hall’s push for a more restrained budgetary approach.
Despite the regular scheduling of CREC meetings in January and May, the uncertainties enveloping economic projections could necessitate additional meetings over the summer to adjust budget expectations.
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Have questions about Michigan politics? Or, just want to let us know what you want more of (less of?) in the newsletter? We always want to hear from you! Shoot us an email at politics@michiganpublic.org!
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What We’re Talking About at the Dinner Table
Tate. Again:
State Rep. Joe Tate, a retired Marine, continues to explore political opportunities, now entering the race for Michigan’s open U.S. Senate seat. This decision follows his previous considerations of running for Detroit mayor or challenging U.S. Rep. Shri Thanedar. While some Democrats are frustrated by past losses under his leadership, the crowded Democratic primary provides an opportunity, as a candidate could win with a minority of the vote. Meanwhile, former U.S. Rep. Mike Rogers is the sole Republican candidate, though U.S. Rep. Bill Huizenga might join the race.
Oof:
The Michigan Legislature has extended the deadline for state officials to file financial disclosures due to technical issues with the Secretary of State’s website. These disclosures are essential for identifying potential conflicts of interest. Oversight hearings are planned by House Republicans, who may summon Secretary of State Jocelyn Benson, as this situation could affect her campaign for the 2026 gubernatorial race.
Master Deflective
A new book about former President Joe Biden’s health is stirring discussion. Governor Gretchen Whitmer, questioned about Biden’s cognitive health, stated she couldn’t comment directly due to her responsibilities in Michigan. Whitmer, a national co-chair of Biden’s reelection campaign, has previously defended him during his campaign challenges.
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Yours in political nerdiness,
Rick Pluta & Zoe Clark
Co-hosts, It’s Just Politics
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IJP ON THE ROAD
Both Zoe and Rick were panelists this week on WKAR’s Off the Record. Republican State Representative Ann Bollin – Chair of House Appropriations Committee – was the guest to discuss the state budget. Watch now
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