Key takeaways from this update:
- CREC budget forecasts: Revenue estimates for 2025‑26 were revised down by $779.4 million. General Fund revenue is now expected to be $980.5 million lower, while School Aid Fund revenue is projected to rise by $201.1 million.
- School Aid Fund growth: We’re watching to see if lawmakers try to use school funds to cover shortfalls in the state’s main budget.
- Next steps in the budget process: The Governor’s proposed FY 2027 budget will be released in mid-February, followed by additional revenue estimates in May before final budget negotiations.
- 2026 elections: All Michigan House and Senate seats, along with statewide offices and a U.S. Senate race, will be decided in November.
- MARSP in action: We’re monitoring budget proposals and advocating for the protection of your earned benefits. We’ll keep you informed and provide tools to engage with lawmakers each step of the way!
Legislative Update: 2026 Budget and Elections—MARSP Monitors, Members Engage
January Revenue Predictions
The first of two annual Consensus Revenue Estimating Conferences (CREC) took place on January 16, 2026. Representatives from the Treasury Department and the nonpartisan House and Senate Fiscal Agencies shared economic and revenue predictions for Michigan. These forecasts will shape the upcoming budget proposals from the legislative and executive branches for Fiscal Year 2027.
Revenue estimates were revised downward for the 2025-26 fiscal year by $779.4 million in combined General Fund and School Aid Fund collections compared to the May 2025 forecast. General Fund revenue is now projected to be $980.5 million lower, while School Aid Fund revenue is expected to increase by $201.1 million.
Looking ahead, projections for FY 2026–27 follow a similar pattern: continued growth in School Aid Fund revenue, alongside an additional General Fund shortfall. Under current projections, the General Fund does not return to a positive balance until FY 2027–28.
This means that lawmakers will have less available revenues to work with in developing next year’s state budget. That said, some context is important here. The decline in General Fund revenue was largely anticipated due to tax changes and the road funding package enacted last year. From the perspective of public education stakeholders, the larger policy question is whether increased School Aid Fund revenue will be used to ease pressure in the General Fund.
You can find expert commentary and presentations from January 2026 CREC through the House Fiscal Agency here and the Senate Fiscal Agency here.
Areas to Watch: State Budget & Elections
State Budget
The state budget impacts all of us. MARSP will continue monitoring the budget process and keep you informed of activities that intersect with our legislative priorities.
- Budget Milestones: With the economic forecast in hand, the State Budget Office will release the Governor’s FY 2027 state budget recommendation in mid-February. The Governor is also scheduled to deliver her final State of the State on February 25, 2026. The second CREC will take place in May before final budget negotiations.
- Budget Timing: The state’s School Aid Budget determines the financial resources available to school districts for the upcoming academic year. MARSP urges policymakers to pass the budget by June 30th so that school districts can plan accordingly.
Elections
The general election on November 3, 2026 will be a pivotal moment for Michigan’s political landscape.
- Statewide Offices: All constitutional offices—Governor, Attorney General, and Secretary of State—will be on the ballot. A crowded gubernatorial field is already taking shape. Additionally, we will have a competitive U.S. Senate race on the ballot due to the pending retirement of U.S. Senator Gary Peters.
- State Legislature: Every seat in the Michigan Senate (38 seats) and Michigan House (110 seats) will be up for election.
MARSP’s Role
The Michigan House in particular expressed an interest this year in “rolling up” categorical spending throughout the School Aid budget. We will continue to educate lawmakers on the complexities of the School Aid budget and the importance of paying down remaining MPSERS pension debt by 2038. We will update members every step of the way!
Your Role
- Stay informed through MARSP’s nonpartisan reporting.
- Learn MARSP’s Key Legislative Priorities at www.marsp.org/advocacy
- Engage with legislators/candidates
- Show up to forums, coffee hours, and town halls. Introduce yourself and MARSP, and ask candidates how they plan to support current and future public school retirees.
- Help organize a candidate forum with your local chapter! Any MARSP chapter that regularly organizes candidate forums will tell you it’s a team effort. Whether you help plan, attend, or support chapter activities through dues, your involvement drives dynamic programming and greater community impact. Find your local chapter at www.marsp.org/community.
Share the value of MARSP membership with colleagues and friends. The more members we have, the stronger our voice in decisions that shape your retirement security.|
