In short, this year’s budget cycle has been challenging for school and district administrators after almost a decade of “lawmakers and the governor [generally finalizing] an education budget by July 1 to align with when the fiscal year begins for K-12” educational entities (Chalkbeat Detroit). As such, when Capitol Perspectives last considered the state budget picture in August 2025, the mood was rather bleak, with “a whopping $6.1 billion” difference in planned overall spending standing between the Michigan House’s general framework via HB 4706 and the Michigan Senate’s much-larger $84.6 billion proposal from May (Michigan Advance). Further, in the context of K-12 education, there was little clarity in how Governor Whitmer and the Democratic-led Michigan Senate would reconcile their vision for the School Aid Fund in the executive budget proposal and SB 166 with the GOP-held Michigan House’s K-12 framework in HB 4577 and a March back-up plan in HB 4162 that proposed only funding “bare bones” K-12 necessities in the case of a shutdown (June 2025 Capitol Perspectives; Chalkbeat Detroit; MASA 3/7 Legislative Update). Moreover, beyond having worries about how policy debates would be resolved, there were concerns about politics seeping into the budget-making process. Emblematically, Michigan Democrats had already started blaming House Republicans for the impasse, saying that they should have made their vision public earlier, and the latter critiqued the former for “playing politics and” advancing a Senate “budget proposal [that was] outdated since revenue estimates...decreased with new federal policies” (Michigan Public Radio; WEMU; August 2025 Capitol Perspectives). All that’s to say that as August turned to September, educators’ dour disposition over state lawmakers’ failure “to pass the School Aid budget before the [Legislature’s self-imposed] July 1 deadline” seemed unlikely to shift much soon (July 2025 Capitol Perspectives; MASA 7/3 Legislative Update; Michigan Advance; WXYZ).
For a brief period toward September’s end, the budget landscape seemed to improve. On Thursday, September 25th, Senate Majority “Leader Brinks, Speaker Hall, and Governor Whitmer jointly announced a deal on the budget” that would allocate “‘nearly’ $2 billion towards roads” through “a 24% wholesale tax on marijuana,...a ‘decoupling’ from federal tax law beneficial to businesses over a 5-year period,” and “a 20-cent-per-gallon increase in the fuel tax” (MASA 9/26 Legislative Update). Even with this reported breakthrough, however, concerns remained as the press release discussing it did not come with formal “votes on budget bills” nor much “indication on what this agreement [would mean] specifically for the School Aid budget” (MASA 9/26 Legislative Update). Additionally, education advocates had some specific K-12 fears. For one, while policymakers stated “that the [School Aid] Fund would be made whole” under this model, there were anxieties that the negotiated framework’s removal of “the sales tax on fuel” to ensure that “all taxes on fuel go to roads...would have a significant impact on School Aid revenue” (MASA 9/26 Legislative Update). Second, with “the compromise budget bill...yet to be publicly unveiled,” education leaders had little certainty about how legislators would resolve the different school funding approaches discussed by Governor Whitmer, the Michigan Senate, and the Michigan House (MLive). Unpacking this ambiguity and its stakes, a September 2nd memo from State Superintendent Michael Rice commented that, while “both the executive budget...and the State Senate school aid budget...could work,” the vision advanced by “the State House...is an outlier budget, which would significantly disrupt services to children.”
Eventually, these concerns swamped any optimism about the framework promised on September 25th, even with another press release from Senate Majority Leader Brinks, Speaker Hall, and Governor Whitmer “less than seven hours before the state's midnight deadline” that promised that “the Legislature will pass a ‘full budget this week’ and government ‘will run as normal’ in the meantime” (The Detroit News). Instead of a vote on a final budget before the state’s deadline on September 30th, school and district leaders got a “proclamation that the government would not shut down” from Governor Whitmer that was devoid of “real details on how she would keep it open” or an explanation of how any “move would be [constitutional] seeing as how a provision in the state Constitution dictates that no government spending could commence without an appropriations bill in place” (Michigan Advance). They also heard, two hours after the state had missed the constitutional deadline to pass “a balanced budget for the next fiscal year,” Senate Majority Leader Brinks say “that [the] agreed-upon deal still stands. But the details hadn't been hashed out and it wasn’t ready for a vote” (Michigan Public Radio).
To end this saga, for now, lawmakers voted in the very early hours of October 1st after “the state’s previous budget had run out at midnight” to pass a “week-long stopgap budget” that “buys more time to avoid a partial government shutdown” (Michigan Public Radio; WWMT). The approved bill, HB 4161, “covers funding for state departments [until October 8th], but not K-12 schools” (Michigan Public Radio). It was “a modified version of the House’s government shutdown avoidance plan passed in March, offering to fund the state at just a fraction of the previous fiscal year’s spending” (Michigan Advance). Notably, the move has precedent and was predicted by some observers as it became clear that the Legislature did not have enough time to finalize the full budget on Tuesday night. In fact, “the state’s last shutdown...in 2009” only “lasted two hours, coming to an end when lawmakers similarly approved a temporary continuation spending plan” (MLive). Reflecting on Michigan’s ability to avoid a shutdown of more than a few hours, some lawmakers offered positive statements. For instance, “State Rep. Alabas Farhat (D-Dearborn), a member of the House Appropriations Committee, said...‘if you see what’s happening in D.C. right now,...I think in Michigan, we’re showing a new path forward and showing a way that we can come together on bipartisan common sense wins’” (Michigan Advance).
Practitioners impacted by the uncertainty seemed less optimistic. In the lead-up to the end of the month, districts noted having to ready “contingency plans that could include leaving critical positions unfilled, cutting programs, taking out high-interest loans, or even scaling back student services such as free meals” (MASA 9/12 Legislative Update). Already, before the official budget deadline, some Michigan districts were communicating to families that “school meals will no longer be free for all students,” while others were sharing plans to “pay for school meals for all students...even if there is no state budget,” using district savings (Chalkbeat Detroit). Importantly, these preemptive cuts and policy changes came in spite of the September 25th announcement of a budget resolution and Speaker Hall saying any reductions are “performative,” given plans to “raise the per-pupil rate — to $10,008 in the Senate-proposed budget to up to $12,000 in the House-backed plan” (Chalkbeat Detroit). Ultimately, administrators appeared to want more than promises from the Michigan Legislature. In fact, one voice commented, “You can’t will a budget into existence with press releases, believe me we tried.”
Concerning what’s next for school funding and the broader state budget, lawmakers still generally maintain that “the base budget is done and agreed upon, and that they’re now in the processing phase” with a “vote [expected] on the conference committee budget on Thursday” (Michigan Advance). Though, there is a lot of work that they must undertake before that vote. For instance, elected officials must “[hold] a Senate Appropriations hearing on each of the earmark spending requests lawmakers submitted under a resolution passed in the chamber” and vote in the Senate on the “road funding legislation that the Republican-led House and Whitmer had pushed for” (Michigan Public Radio). Education leaders will surely be hoping that the promised budget comes together quickly. Given that “districts receive [per-pupil] funding in 11 monthly state payments” and “the next is due Oct. 20 but would not go out if the state government is closed,” administrators could feel drastic impacts if the budget debate is not resolved by then (Chalkbeat Detroit). School and district leaders will also be hoping that the agreed-upon School Aid Fund framework, which has yet to be released, meets the needs of their students and educators.
If readers were hoping for greater budget clarity from the federal government, they are likely to be disappointed. Much like the Michigan Legislature, the U.S. Congress had until the end of September 30th “to negotiate a budget...to avoid a government shutdown” (MASA 9/26 Legislative Update). The most likely path to do so was U.S. Senate approval of a September 19th U.S. House measure that would have “extend[ed] current federal spending levels for seven weeks while lawmakers work out the finer details of a full budget” (EdWeek). Instead, this measure was rejected, and federal leaders delivered “the first [federal shutdown] in seven years” (EdWeek). With less of a clear path to a resolution, education leaders are already expressing concerns about what a federal shutdown could mean for K-12 schools.
The federal government’s budget impasse could harm Michigan districts in a few respects. First, “there are concerns that Impact Aid and Head Start services could be impacted, due to the nature of how they are funded” (MASA 9/26 Legislative Update). The former program “reimburses school districts that have less revenue because their district is located on federal land – like a military base, Native American reservation or Alaska Native lands” (U.S. News & World Report). The latter one relies on federal grant dollars to operate. Further, because the shutdown will cause “new grantmaking activity [to] end,” districts seeking supplemental resources might be left high and dry at least temporarily (The Hill). That said, if the federal shutdown is limited, there is some hope that its financial impacts on schools could be blunted by the fact that “most grant funding from the agency is awarded during the summer” and that the federal government has promised that it “‘will...make Title I and IDEA grant funding available as usual’ during a shutdown” (EdWeek; The Hill). Representatively, “Christy Wolfe, director of K-12 policy at the Bipartisan Policy Center,” affirmed this vision, saying, “We don’t anticipate any direct impact on states or schools given the amount of funds that have already been allocated. The department has indicated that they would continue to move forward with the obligation of funds that would normally be obligated on October 1” (The Hill). However, “the White House’s withholding of federal dollars for education programs in July had elicited concern about advanced cash, though the July money has since been released” (Politico). Second, education advocacy groups have elevated fears that a federal shutdown could deepen cuts to the U.S. Department of Education, which is already operating with limited staff members after the U.S. Supreme Court “ruled...that it would allow the Trump administration to resume dismantling the U.S. Department of Education,” staying a preliminary injunction that told administration leaders “to reinstate many of the nearly 1,400 workers...laid off” (NPR; NBC News; July 2025 Capitol Perspectives). On September 28th, the agency released a contingency plan for a shutdown that would involve “immediately furloughing more than 2,000 agency employees—nearly 95 percent of the overall staff—and pausing almost all activity around federal grants and civil rights enforcement” (EdWeek). While this approach and the idea of temporary employment impacts during a shutdown are not unprecedented, this time around, “top administration officials...are urging agencies to use the shutdown as an opportunity to permanently lay off large numbers of workers” (EdWeek). Finally, more foundationally, the shutdown could prove to be an opening for “an acceleration of the Trump administration’s stated goal of reducing the federal government’s role in supporting education” (EdWeek). Various desired changes to the size of the U.S. Department of Education and the scope of its work have been featured in previous editions of Capitol Perspectives, especially related to English learners, migrant students, pupils with disabilities, and families alleging civil rights discrimination (August 2025; July 2025; June 2025; May 2025; April 2025; March 2025; February 2025; January 2025). They could be actualized further now.
Looking ahead, to resolve “a shutdown, Congress must either approve a short-term funding resolution or pass all 12 full-year appropriations bills” (MASA 9/26 Legislative Update). Of those options, the approach relying on a stopgap measure seems most likely, given that “the last time” that “all 12 appropriations bills [were] passed by Congress and signed by the president before the start of the new fiscal year” was 1997 (U.S. News & World Report). While Republicans control the U.S. House and can pass a spending measure on their own there, in the U.S. Senate, “60 votes are needed to advance” such legislation, and there are only 53 Senate Republicans (MASA 9/26 Legislative Update). Commentators have noted that “federal lawmakers appear far apart,” with Senate Democrats calling for “more protections for their constituents against spending cuts and policy changes Republicans approved along party lines earlier this year,” especially concerning Medicare and Affordable Care Act subsidies (EdWeek; The Hill). As is the case with the Michigan budget delay, the exact impact of the shutdown will depend on its length. This point is even truer for the federal government, though, given that the U.S. Department of Education’s contingency plan “is only in place for a week; a shutdown longer than that would require revisiting it” (The Hill). Such a reconsideration could open the door to even more drastic reforms.
For the most part, budget debates have sucked the air out of the room when it comes to other legislative efforts in Michigan. That said, there was some action in September. In the Michigan House, two efforts stood out as worth noting. First, the House Education and Workforce Committee unanimously advanced HB 4556 and HB 4557 to “remove the requirement for Michigan 11th graders to take the SAT writing test as part of the Michigan Merit Examination (MME)” and “eliminate the mandate that individual subject scores from the MME appear on student transcripts” (MASA 9/26 Legislative Update). Notably, the package is “supported by MASA, MASB, the Michigan College Access Network, the Michigan Association of Secondary School Principals, and the Michigan Association for College Admission Counseling” (MASA 9/26 Legislative Update). Second, the Michigan House passed HB 4024 by a vote of 58 to 46 to limit “access to restrooms and changing rooms in schools, community colleges, and universities based on sex assigned at birth” (MASA 9/12 Legislative Update). This action fits squarely into a broader debate over parental rights in terms of students’ gender identities. Also in September, “a federal judge...allowed a west Michigan lawsuit to proceed that could have broad implications for whether public schools must inform parents about LGBTQ children’s gender identities” based on a case where a couple argues “that the Rockford schools in Kent County violated their rights when its staff failed to tell them about its decision to call their child by a different name and pronouns” (Bridge). At this point, HB 4556 and HB 4557 still need to be considered by the whole Michigan House, and HB 4024 would need to be greenlit by the Michigan Senate and signed into law by Governor Whitmer.
Across the Michigan Capitol, the Michigan Senate also saw some legislative activity. Namely, state lawmakers approved SB 204, which “mandates that all public schools adopt a formal school building closure policy by July 31, 2026” that includes “clear steps and [a plan to] involve stakeholders before any closure is finalized” (MASA 9/12 Legislative Update). In this case, the vote was by a margin of 19 to 15 (Michigan Legislature). While this legislation and the efforts in the Michigan House show what issues are top-of-mind, they are likely to face political hurdles as they move from one chamber to the other. This summer, the Michigan Legislature set a “dubious 85-year record on productivity,” with the “six public acts Gov. Gretchen Whitmer signed into law this year as of July 15” representing “the fewest number of signed bills at this point...since 1940” (Michigan Association of Counties). Whether the eventual resolution of Michigan’s budget impasse translates into greater collaboration or whether the intense polarization, partisanship, and gridlock that have characterized fiscal debates continue remains to be seen. Either way, legislative updates can be expected in future editions of Capitol Perspectives.
For questions or more information, please contact Tyler Thur in the Office of K-12 Outreach at thurtyle@msu.edu.