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Legislative Update: Michigan FY 2027 Budget Keeps MPSERS Funding on Track
At a Glance
- FY 2027 budget signed: Governor Whitmer signed the state budget on July 21, 2026.
- MPSERS funding unchanged: No significant policy changes to pension or retiree health funding. Pension debt payoff remains on track for 2035.
- School funding formula updated: Michigan will use a new weighted foundation allowance that directs more funding based on student needs.
- Election season: All Michigan House and Senate seats, plus statewide offices, are on the ballot this year.
- MARSP and elections: MARSP does not endorse candidates and continues to monitor legislation affecting public school retirees.
New School Funding Formula, No Changes to MPSERS
This year’s budget includes a significant change to how the per-pupil foundation allowance is calculated. For years, schools have received a per-pupil “foundation allowance” for general operations, plus separate pots of money, called “categoricals,” to address specific needs, such as at-risk programs, declining enrollment, literacy, and MPSERS costs. Those categoricals have increased so much that the per-pupil foundation allowance now comprises roughly half of the School Aid budget.
The new budget combines the foundation allowance with the at-risk and English Language Learner (ELL) categoricals into a single “weighted foundation allowance.” In plain terms, funding will follow student needs more closely, rather than following the traditional model, which is based mainly on headcounts.
The budget leaves MPSERS funding alone, with no significant policy changes compared to last year’s budget. As MARSP has reported previously, retiree health care liabilities are now fully funded, and the state remains on track to pay off all pension debt by 2035. We appreciate the state continuing to make steady progress towards paying off pension debt.
Michigan’s FY 2027 budget protects MPSERS funding. Get the latest legislative update and learn how public school retirees can stay informed during election season.
With lawmakers now in recess, legislative activity is expected to remain quiet until after the election.
Every seat in the Michigan Legislature is on the ballot this year, along with several statewide offices. As election season continues, the Republican gubernatorial primary and Democratic U.S. Senate primary are expected to draw significant attention.
MARSP is an independent, nonpartisan organization. It does not endorse political parties or candidates. During election season, MARSP encourages members to learn about candidates, attend local forums, ask informed questions, and help ensure issues affecting Michigan public school retirees remain part of the conversation.
- For practical advice on evaluating candidates, finding reliable information, and staying focused on the issues that matter most, read Preparing for Election Season: Tips for Michigan Public School Retirees.
- Make sure you’re ready to vote by visiting the Michigan Voter Information Center.
- Check your voter registration: Confirm your registration status before Election Day.
- Find your polling location and voting information: Verify your polling place, view your sample ballot, and get election details.
- Request an absentee ballot: Learn about Michigan’s no-reason absentee voting option and request a ballot if it works best for you.
- Contact your local election clerk: Reach out with questions about registration, ballots, polling locations, rides, or accommodations.
- Check your voter registration: Confirm your registration status before Election Day.
- Year round resource: How to introduce yourself to your elected officials (PDF download).
Legislative Update: Michigan FY 2027 Budget Keeps MPSERS Funding on Track
Governor Whitmer signed the FY 2027 state budget on July 21, 2026.
