Michigan State Spending Debate Heats Up as West Michigan Residents Question Value of Tax Dollars

Michigan State Spending Debate Heats Up as West Michigan Residents Question Value of Tax Dollars

West Michigan, April 6, 2026 — A contentious debate over Michigan state spending is gaining momentum as residents across West Michigan begin to question whether the billions in tax dollars allocated by state lawmakers are delivering the promised results for their communities.

The discussion centers on a $9 billion surplus that Michigan lawmakers had at their disposal starting in January 2023. According to research by the Mackinac Center, that money has been largely spent on state priorities, with schools receiving the biggest share of funding increases.

Where the Money Went

The Mackinac Center's analysis reveals that Michigan's school aid budget grew from $13.0 billion before the pandemic to $18.9 billion in the current budget — a $5.8 billion gain. This increase represents 40 percent of what the state currently collects from income tax revenue.

When combining state, local, and federal sources, schools in Michigan now receive an average of $23,867 per student from all funding sources.

However, the same analysis notes that despite increased spending, Michigan's public education system continues to lag behind other states in performance metrics.

Medicaid received the next largest increase in annual spending. The federal government temporarily relaxed eligibility rules during the pandemic, causing Michigan's Medicaid enrollment to rise from 2.5 million to 3.2 million recipients. While enrollment has since returned to pre-pandemic levels of 2.5 million people, total spending at the Department of Health and Human Services increased from $26.5 billion in 2018-19 to $39.3 billion today.

The federal government pays the bulk of Medicaid costs, with total state spending on the department increasing from $7.5 billion to $11.4 billion — a $3.8 billion increase.

Transportation Investment

Roads represented the next major budget priority, with the transportation budget increasing from $3.5 billion in 2018-19 to $5.4 billion in the current budget. Much of this additional funding came from marijuana tax increases, but 80 percent of the money arrived without corresponding tax hikes.

The Mackinac Center notes that road funding is now at historic levels and should be sufficient to repair roads faster than they deteriorate.

Higher education received an additional $788 million in state funding, mostly directed toward new scholarship programs. The Michigan State Police budget increased by $220 million, while the Department of Environment, Great Lakes and Energy received an additional $215 million.

Business Subsidies and Pork Projects

Lawmakers have also invested in various expensive but nonrecurring priorities. The state has authorized $6.8 billion in selective business subsidies since 2020 and $4.4 billion in 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 during their two years of control. These authorizations included funding for electric vehicle plants that were ultimately redirected to other uses and site preparation for a semiconductor plant that was never built.

The Mackinac Center reports that lawmakers may have learned from these experiences and authorized no new business subsidies in 2025. Legislators are now spending less on pork projects, or "legislatively directed spending." This type of spending ballooned to $1.8 billion in fiscal year 2023-24 but has since come down to $360 million in the current fiscal year — roughly what it takes to operate a fifth of the state's community colleges for one year.

What West Michigan Residents Are Saying

Residents across West Michigan, from Grand Rapids to Muskegon, are weighing in on whether these spending decisions are delivering value for their communities.

The debate particularly resonates in rural West Michigan communities where residents have felt the impact of rising healthcare costs and transportation challenges.

"The money is there, but are we getting what we need?" asked one resident in Kent County. "Our schools are still struggling, our rural hospitals are closing services, and the roads are still in poor condition in many areas."

The Mackinac Center's analysis suggests that the returns on investment have been mixed. While motorists may see long-term improvements in road quality after all the increases in spending on repairs, other priorities don't seem to have paid off.

Lawmakers spend more on education but the quality of public education continues to fall behind that of other states. The state also spends much more on Medicaid to chase federal matching funds. Expensive business subsidies have not generated the expected economic returns. And there has been an explosion of pork spending that is being reassessed.

Looking Ahead

The debate over state spending continues as Michigan lawmakers face the 2026 budget cycle. The Mackinac Center notes that the state spent $788 million more on higher education, mostly on new scholarship programs, $220 million more on the state police, and $215 million more on the Department of Environment, Great Lakes and Energy.

As West Michigan residents weigh these decisions against their daily realities, the question remains whether the state's spending priorities are aligned with the needs of communities across the region.

The $9 billion surplus that once seemed like a windfall for state investment now faces scrutiny. Lawmakers balance the state's budget, so the budget is never more than what the state collects in revenue plus anything lawmakers may have saved in the past. The surplus in 2023 existed because the Republican-majority Legislature could not agree on budget priorities with the Democratic governor in 2022. Revenue flowing into the treasury during the pandemic was also substantial.

The state's various taxes collected $31.5 billion in fiscal year 2018-19, before COVID, and they collected $40.1 billion in fiscal year 2021-22. So it wasn't just disagreement that led to more money available in 2024; tax levies collected more revenue for legislators to spend.

The question now is whether the spending has delivered the promised results for West Michigan residents and communities.

Sources

• Mackinac Center blog post on Michigan surplus spending: https://www.mackinac.org/blog/2026/where-did-michigans-surplus-go
• Michigan State Housing Development Authority announcement on Grand Rapids and Saline projects: https://www.michigan.gov/whitmer/news/press-releases/2026/03/31/whitmer-announces-50-housing-units-and-commercial-space-coming-to-grand-rapids-and-saline
• MLive article on Boston Square apartment grant: https://www.mlive.com/news/grand-rapids/2026/04/grand-rapids-boston-square-apartment-building-gets-13m-grant.html
• MDOT press release on US-31 improvements near Interlochen: https://www.michigan.gov/mdot/news-outreach/pressreleases/2026/04/01/us-31-rebuilding-detour-near-interlochen-could-begin-as-early-as-april-7