In this episode of the Facts Matter podcast, host Guy Gordon and infrastructure specialist Eric Paul Dennis discuss the recent road funding package passed in Michigan. While the potential for increased funding, if the estimated revenue is achieved, could lead to significant improvements in road conditions, uncertainty about revenue estimates can hinder long-term planning for road agencies. Only 30% of the new road funding revenues are guaranteed.

Guy and Eric explore the implications of the new funding sources, including a marijuana wholesale tax and earmarks for corporate income tax, and the uncertainties surrounding revenue guarantees. These uncertainties are already posing challenges to at least one major local road agency in planning and executing projects. Local road agencies may also face challenges in accessing new funds due to complex criteria, and the distribution of funds may favor certain local agencies over others.

5:18 - graph of Corporate Income Tax revenue FY2012-FY2024

10:52 - graph of State Revenue Sharing, inflation adjusted to road building inflation

13:40 – graph of change in State Revenue Sharing to cities and villages

Their conversation highlights the potential for increased funding while also addressing the complexities and inefficiencies in the current funding system. Ultimately, they call for a comprehensive review of the funding process to ensure that it meets the needs of all communities in Michigan.

"We need to think about this differently."

Guy sits down with Karley Abramson, research associate for health policy, to talk about the seriously high level of poor health among Michiganders, a level showing increasing signs of further deterioration.

Citizens Research Council just released exhaustive research, authored by Abramson, that drills down to root causes of why Michiganders suffer from worse health outcomes than residents in similar, neighboring states and even across the U.S. The paper, Social Determinants of Health: Pathways to a Healthier Michigan, clearly translates what Social Determinants of Health (SDOH) mean for Michiganders and how they directly affect the state’s economy and our collective ability to prosper.

Interconnectedness – All Policy is Health Policy

This report unpacks SDOH by focusing on the evidence-based fundamental resources that are necessary for individual health: Financial Resources; Health Care; Food and Nutrition; Safety; and Social Support.

Abramson explains that all the evidence and data point to two broad themes: the interconnectedness of the social determinants of health and the centrality of financial resources in the story of Michigan residents’ lagging health outcomes.

“In every area of public policy, there is a nexus to health and well-being,” the report notes. “The centrality of financial resources – education, employment, and income – is the story of Michigan’s lagging health outcomes.”

A Research Council Podcast Roundtable: Michigan’s 2025 Budget Breakdown

In a first-ever roundtable edition of the #FactsMatter podcast, Guy Gordon recaps recent budget conversations and even more recent updates from the finally passed and long-overdue Michigan budget with the Research Council’s Eric Lupher, president; Craig Thiel, research director; Bob Schneider, senior state affairs associate; and research associates Karley Abramson, health policy; and Eric Paul Dennis, infrastructure.

First up — roads. Guy chats with Eric Paul Dennis on how nearly $2 billion in new funding should bump Michigan to about 15th in the nation for road spending, but the complicated Act 51 formula still means many local roads won’t see major improvements. Transparency at the pump is better — but how those dollars are spent? Still murky.

Karley Abramson explained how healthcare saw one of the biggest surprises: the Rx Kids program jumped from a $16 million pilot to $270 million statewide, offering direct cash assistance to new mothers. A rare bipartisan investment in babies and brain development.

Craig Thiel explained how schools also got good news — universal free breakfast and lunch continue for all K–12 students, and funding for at-risk kids rose 25%, with hopes of boosting early literacy.

Eric Lupher and Bob Schneider took on taxes in the budget, and how lawmakers avoided a $670 million hit by decoupling from the federal “One Big Beautiful Bill Act.” Businesses aren’t thrilled, but it keeps the state budget stable.

And transparency? Mixed. The state promised more, but much of the final deal was done behind closed doors — without final revenue estimates to guide spending.

In short, Michigan’s 2025 budget may be remembered for potholes and pot — big fixes on roads and kids, but still a few bumps ahead when it comes to accountability.

Guy Gordon and Bob Schneider, Citizens Research Council’s senior research associate for state affairs, look at what is in the final state budget, signed into law this week by Governor Whitmer, from both the 30,000 foot level and the nitty gritty level, digging into some of the elements that didn’t receive much attention.

Calling it the Michigan ‘Potholes and Pot’ budget, Guy and Bob discuss how the budget finally tries to start addressing how Michigan funds roads by removing the confusing sales tax on gasoline, so those dollars now go directly where they belong: fixing roads.

But that change also cuts off money that used to flow to schools and local governments.

Backfilling the School Aid Fund

Schools were mostly held harmless, but because some of their funding was shifted to universities, K–12 districts end up about $400 million short.

No Backfill for Cities, Villages and Townships

Local governments weren’t so lucky — they’re losing around $93 million, which could mean tighter budgets for public safety and local services.

This equals a 5–10% reduction, depending on the community.

Impact varies: Townships may be more affected since revenue sharing can be a large portion of their budget.

Some public safety grants (~$42M) were added, but they’re targeted and don’t offset the broader cuts.

Budget Gimmicks and Sustainability

The good news? No budget gimmicks this year. It’s considered honest and sustainable, with no major short-term gimmicks like early payments or delayed obligations, even as COVID-era one-time funds fade away. Michigan budgeted one-time funds carefully.

While some lawmakers claim the budget is smaller, it’s actually slightly larger once you count all spending — around $84 billion total.

On the process side, there was real progress: lawmakers made earmark requests public and transparent. But the process was still rushed, and there was a big miss — the state skipped the usual public revenue estimate, leaving a major transparency gap.

In short: Michigan’s budget is cleaner, more sustainable and fixes old problems than in past years. But leaves a few new ones to deal with in coming years. The budget solves long-standing issues around fuel taxes and revenue use. Schools were protected, but took a secondary hit from a university funding shift.

The budget is sustainable, transparent, and returns to normal size relative to the state’s economy.

Karley Abramson, health policy associate for the Research Council, speaks with Guy about her most recent paper, Upcoming Changes to the Affordable Care Act (ACA) Tax Credits Will Also Disrupt Michigan’s Health Care System, which details how the One Big Beautiful Bill Act would likely result in about 200,000 fewer Michiganders having health care, including about 100,000 who will become uninsured because Congress did not renew or extend the Enhanced Premium Tax Credit (EPTC). The other half are expected to become uninsured due to new administrative requirements that may create barriers to people qualifying for EPTC.

Data indicates that about 8 million fewer Americans will have health care over the next decade.

“Our research found that of the 530,000 Michiganders who purchase health care through the ACA, more than 350,000 are covered by a tax credit-supported plan,” said Abramson. “As a result of the tax credit enhancement under the 2021 American Rescue Plan 2021, expanding both the size of the credit and who is eligible, premiums for plans sold on the Marketplace have been much cheaper for many enrollees compared to 2020 and earlier.”

Since the introduction of the Enhanced Premium Tax Credit, nationwide coverage through the Affordable Care Act marketplace has doubled.

Abramson also addressed how the end of these tax credits goes far beyond the financial hardship they impose on Michiganders who directly use them.

“This would lead to worse health outcomes for people across Michigan. More uninsured people mean health care costs will go up for everyone, in the form of higher health insurance premiums paid by individuals and employers,” she said.

More uninsured people mean health care costs will go up for everyone in the form of higher health insurance premiums, the paper notes. Michigan hospitals will likely see increased rates of uncompensated care, which will worsen hospitals’ financial burdens and potentially lead to reduced services and even closure. Much in the same way that the OBBBA Medicaid cuts are expected to impact Michigan, people not buying private insurance through the Marketplace will likely have cascading effects across the state.

“Combined with cuts to Medicaid — which already threaten to strip health care from hundreds of thousands of Michiganders — health care in our state faces a dire downward spiral that will put people’s health, safety and well-being at risk.

The paper also addresses solutions, with the most immediate being for policymakers to renew the EPTC before the end of this year.

“We also believe that state legislators in Lansing can create a Michigan-specific tax credit to assist those purchasing insurance through the marketplace or provide incentives for preventative care and vaccinations,” said Abramson.

“Doing nothing will have serious long-term ramifications for Michigan families, Michigan businesses and Michigan’s economy.”

Guy speaks with Senior Research Director Craig Thiel about his recent issue brief looking at Michigan’s efforts to improve early literacy among low-income students, with increased funding and accountability measures. Unfortunately, while the data is still relatively new, the state’s efforts are not yielding hoped-for results.

While Michigan student test scores in several other grades and subjects have shown important (albeit gradual) improvements since the COVID-19 pandemic, the reading proficiency rates for third- and fourth-grade students continue to decline. A recent reminder of this concerning trend was brought to light when the Michigan Department of Education released the Spring 2025 statewide assessment results, showing that fewer than four in ten third graders tested proficient in reading.

The new analysis of third-grade reading results for at-risk students shows that fewer than half of all Michigan school districts have demonstrated improvement in “at-risk” student reading proficiency rates since the end of the COVID-19 pandemic. These district-level improvements, however, varied based on a district’s socioeconomic status.

“We found that 50 percent of high-poverty districts saw improvement in third grade reading proficiency rates among “at-risk” students, compared to just 37 percent of low-poverty districts,” Thiel said.

Guy and Eric Lupher delve into the weeds, discussing the pros and cons — more pros — of allowing local units of government in Michigan to have a local tax option. Michigan is one of just a few states that doesn't allow local governments to levy a local tax without state legislative approval. Most states, including those with conservative leadership such as Indiana and Ohio, provide multiple means for their local governments to raise revenue for their local communities.

One unintended consequence of the prohibition on local tax options is intense pressure on Michigan property taxes, which are among the highest in the nation. Michigan relies too heavily on property taxes for nearly all local government expenses.

"In simple terms, cities and villages should have the ability to determine how they want to operate. They can decide things like how many city council members there should be, whether they should elect or appoint the clerk, and all kinds of other details and niceties related to state and city operations. But these cities cannot choose to levy an alternative tax. They're at the mercy of the state."

The Legislative Power Grab of 1963

Guy and Eric go back to 1963, when the current Michigan constitution was enacted by the people, granting home rule powers and giving cities the authority to levy taxes beyond the property tax.

"But the ink wasn't even dry on the Constitution before the legislature jumped in and said, 'wait a second, you can't do that unless we say you can do it.'"

Was it a power grab? Or was it a statement from the Legislature that it didn't trust the city of Detroit, Flint, or other big cities to be responsible in how they levy these taxes?

"It was both a power grab and putting the foot on the local governments. Just three years before that, Detroit was the first city to levy a local income tax. It didn't need it at the time, nor did it request authority from the state to do so. So I think state legislators were a little gun-shy, right? If Detroit is going down this path, what other cities will follow?

"So yes, it was a power grab; and even back then they had the idea of limiting taxation, but it was also a way to tell local governments, ‘You’re creatures of the state and we, the state, will decide how much power you should have.'"

Guy Gordon chats with Citizens Research Council president Eric Lupher about his study examining how an admissions tax on sports and entertainment venues could help offset some of the costs of providing public services that support these venues and their visitors.

The study, commissioned by the City of Detroit’s Legislative Policy Division, focuses not only on Detroit but also on several other Michigan cities that could benefit from revenues generated by an admissions tax. These revenues could be used to provide benefits such as property tax relief and to invest in attracting future national events to Michigan.

Among the many issues the report, Evaluating Local-Option Admissions Taxes in Michigan, examines are the economic impact of events, admission tax revenue estimates, tax design and policy considerations, revenue generation from comparable cities, the advantages and disadvantages of local-option taxes, and the viability of Michigan having an admissions tax.

In a Nutshell:

Detroit is one of the few major cities in the U.S. that does not levy an entertainment/amusement/admissions tax. While this means the city is not taking advantage of a revenue source commonly used by other cities, it also means that the city can learn from the processes and experiences of others.

Depending on how an authorizing state law would define the base and the tax rates authorized, Detroit could yield upwards of $50 million from an admissions tax.

Revenue from an admissions tax could be used to enhance city services, diversify the city’s revenue streams, provide property tax relief, and put into a fund that could be used to draw major national events to the city.

“Several Michigan cities serve as regional hubs for culture, commerce, sports teams, concerts, and conventions,” said Eric Lupher, president of the Research Council, adding there are even more that host events that, relative to their size, similarly incur service costs. “Detroit stands alone as the largest city in this role, with four major professional sports teams, concert halls, theatres, and other venues that attract attendees from throughout Southeast Michigan and beyond.”

The study concludes that while a new state law would be needed to authorize local admissions taxes, the state legislature should consider allowing cities to impose an admissions tax to enhance revenue streams, help cover costs associated with hosting events, and provide property tax relief.

#FactsMatter host Guy Gordon chats with Craig Thiel, Research Director for the Citizens Research Council, who first wrote about the impact of state budget uncertainty on Michigan’s $200 million School Meals program back in June –before passage of the federal One Big Beautiful Bill Act (OBBBA). Michigan’s two-year-old School Meals program guaranteed universal access to free school breakfast and lunch to all K-12 students across the state, regardless of their income status.

The continued lack of certainty about Michigan’s K-12 budget, due to its not being passed, has already prompted at least one notable district, Okemos, to discontinue its universal school meals program, effective the first day of school. Funding for the state School Meals program, established in response to student food insecurity concerns following the COVID-19 pandemic, has been in place for the last two years. Current funding will end on September 30.

The budget passed by the Michigan House does not include dedicated funding for the universal school meals program. The Governor’s proposed budget and the Senate budget do.

The income-based federal free breakfast and lunch program will continue. However, with the federal government imposing major changes to SNAP and Medicaid through OBBBA, eligibility can change. Thiel explained:

“Right now, no one knows the specific numbers of impact, either nationally or in Michigan, but we do know the general direction: people will be losing access to Medicaid and access to SNAP. And those programs are used in Michigan schools to help identify students for free meals.”

The majority of the $200 million from Michigan’s budget covered the difference between what the federal government covers and the cost of feeding all children. For students, it also removed any stigma associated with the federal income-based food breakfast and lunch program.

Thiel stated that approximately 150,000 to 200,000 additional students participated in Michigan’s School Meals program in 2024-25, compared to 2022-23, according to Department of Education data.

“About 10 to 15 percent of K-12 students would lose access to these free meals.”

Put on your tick spray because we are headed into the weeds! Announcing “In the Weeds,” a new occasional podcast from the Citizens Research Council of Michigan Universe. As described by our host, broadcast giant Guy Gordon, In the Weeds is for “those who are a little wonkier, a little nerdier, and who want to dive deeper” into public policy issues discussed on our regular #FactsMatter podcast.

Joining Guy in the weeds for this first podcast is Research Council infrastructure analyst is Eric Paul Dennis. Eric and Guy piggyback off their conversation in the most recent #FactsMatter podcast on why so many Michigan roads are so bad, road funding dysfunction and why Michigan hasn’t been able to solve this problem for decades. They discuss the outrageous level of complexities involved in accessing the conditions and funding of Michigan’s roads and how Michigan roads stack up, apples-to-apples, against other states. They also discuss badly needed reform of Act 51, a 74-year-old “zombie” bill that is the primary funding mechanism of Michigan road program. Guy presses Eric on whether Act 51 is fair (“no”) or needs-based (“no”).

Eric also makes the case that real reform of Act 51, which could take several years and cost millions, could guarantee that all agencies currently receiving Act 15 funding are held harmless, ensuring that their current level of funding would never decrease under any new road funding formula.