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Michigan Legislature Approves 2026 Budget and 24% Cannabis Tax for Roads, Sends Plan to Whitmer

The bills now await Whitmer’s signature.

Overview

  • After overnight votes, lawmakers passed a $51.8 billion general government plan and a roughly $21.3 billion school aid package following a short-term continuation that kept agencies funded past the Oct. 1 deadline.
  • The package includes a new 24% wholesale marijuana tax, added to the existing 10% excise, projected to raise about $420 million a year for roads starting Jan. 1.
  • School funding raises the per‑pupil allowance 4.6% to $10,050, restores $321 million for mental health and safety, and continues universal free school meals with $201.6 million.
  • The budget cites large department adjustments tied to federal shifts, cuts more than $7 billion from MDHHS, eliminates about 2,000 unfilled state positions, and sets 80% office‑occupancy targets to curb costs.
  • Business groups say corporate tax changes will add about $2 billion in costs over five years and cannabis industry leaders object to the new tax rate, even as the plan boosts long‑term road funding with added revenue shifts and a per‑mile fee pilot.