Michigan's $9 Billion Surplus Spending Raises Questions About West Michigan Services and Return on Investment

Michigan Taxpayers Funded Massive Spending Surge But West Michigan Residents Don't See Corresponding Improvements

By West Michigan State News

Michigan lawmakers had nearly $9 billion in surplus funds at their disposal starting in January 2023, according to the Mackinac Center for Public Policy. That money didn't disappear. Lawmakers spent it. The question that matters most to West Michigan residents is whether the spending was worth it.

The Scale of Spending

Between fiscal years 2018-19 and 2024-25, Michigan state spending increased dramatically across multiple categories. Schools received the largest boost, with the school aid budget increasing from $13.0 billion before the pandemic to $18.9 billion in the current budget. That represents a $5.8 billion gain, which equals 40 percent of what the state collects from the income tax.

Medicaid received the next biggest increase. Total spending at the Department of Health and Human Services grew from $26.5 billion in 2018-19 to $39.3 billion today. The federal government pays the bulk of Medicaid costs, but state spending at the department increased from $7.5 billion to $11.4 billion, a $3.8 billion increase.

Roads were the third major priority. The transportation budget increased from $3.5 billion in 2018-19 to $5.4 billion in the current budget. Part of this comes from marijuana tax revenue, but 80 percent of the money came without tax hikes.

Other areas saw smaller increases. The state spends $788 million more on higher education, mostly on new scholarship programs. State police funding increased by $220 million. The Department of Environment, Great Lakes and Energy received an additional $215 million.

Corporate Welfare and Pork Projects

Lawmakers also spent on expensive but nonrecurring priorities. The state has authorized $6.8 billion in selective business subsidies since 2020 and $4.4 billion on pork projects.

When Democrats took majorities in both chambers of the Legislature in 2023, corporate welfare became their top priority. They authorized $4.7 billion in selective subsidies over their two years of control. These authorizations included money for electric vehicle plants that got shifted into other things and site preparation for a semiconductor plant that was never built.

Pork projects, or what some call "legislatively directed spending," ballooned to $1.8 billion in fiscal year 2023-24 but has since come down to $360 million in the current fiscal year. Despite the reduction, $360 million is roughly what it takes to operate a fifth of the state's community colleges for a year.

The Return on Investment Question

Motorists may see long-term improvements in road quality after all the increases in spending on repairs. But other priorities don't seem to have paid off.

The state spends more on education, yet the quality of public education in Michigan falls behind that of other states. According to data from the Mackinac Center, schools receive an average of $23,867 per student from combined state, local and federal sources. That per-pupil spending has increased significantly, but standardized test scores and other quality indicators haven't kept pace with other states.

The state also spends much more on Medicaid to chase federal matching funds. Expensive business subsidies have not paid off. The semiconductor plant that was never built represents millions wasted.

West Michigan Perspectives

For residents of Grand Rapids, Kalamazoo, Muskegon, Holland, and Battle Creek, the question becomes personal. Families are paying higher taxes while wondering if their children's schools are actually better. Drivers are paying for road improvements that may not be visibly better. West Michigan businesses have received subsidies, but have they created sustainable jobs or economic growth?

The Mackinac Center's analysis shows that the state spent $2,178 per person in 1967-68 but $4,832 in 2024-25, for a 122 percent increase. Michigan's population increased from 8.7 million in 1968 to 10.1 million in 2025, an increase of 1.4 million, not 3 million as some state officials claimed.

State Officials Respond

State Senator Mallory McMorrow told MIRS that "our revenues simply are not keeping up" and that "the tax burden has shifted off of corporations and on to middle-income taxpayers." He heard residents saying, "I feel like I'm paying a lot. I'm not getting anything for it."

This sentiment resonates throughout West Michigan. Residents are paying more taxes but seeing mixed results in the services they fund.

What's Next

The state may have learned from its mistakes. Legislators are now spending less on pork projects. Authorizations for new business subsidies have been zero in 2025. But the billions already spent remain.

The Mackinac Center's analysis suggests that Michigan taxpayers are getting a paltry return on their investment. The state spent far more money, but the quality of services hasn't kept pace.

For West Michigan residents, the question is whether there's a way to get better results with less spending. The current model shows significant increases in revenue but mixed outcomes in service quality.

The state needs to answer whether the spending was worth it. Residents are paying more, but they're not seeing corresponding improvements in their schools, roads, and other essential services.