Michigan’s Senate Appropriations Committee pushed its two heaviest budget bills to the full chamber floor on Thursday, advancing spending plans for the Michigan Department of Health and Human Services and K-12 school aid while staring down a $1.8 billion hole punched into state finances by federal action out of Washington.
Both bills cleared committee on April 23, 2026. Sen. Sarah Anthony (D-Lansing), who chairs the committee, didn’t dress it up. The shortfall is real, it’s big, and it’s coming directly from Congress.
Anthony’s read on the damage traces back to House Resolution 1, the One Big Beautiful Bill Act. That legislation doesn’t just shift policy. It shifts costs onto Michigan and every other state that depends on federal health and nutrition programs. The $1.8 billion gap Michigan’s budget writers are now managing isn’t a projection. It’s the math that falls out when you run what H.R. 1 actually demands against what the state currently has.
School aid and MDHHS spending aren’t line items you can trim around the edges. Together they’re the two largest chunks of what Michigan spends every year, which is why their movement out of committee counts as the K-12 finance structure Senate’s biggest budget lift of the session.
A Rainy Day Fund Gets Put to Work
Anthony had been holding the line against touching the state’s rainy day fund. That position didn’t survive contact with the actual numbers.
Once the committee worked through the figures, she said a targeted draw on reserves wasn’t optional. Cuts alone couldn’t close it. The Senate’s answer is a $350 million carve-out from the rainy day fund, designated as an H.R. 1 Impact Fund. The idea is a dedicated pool specifically built to absorb what federal policy is now dumping on state balance sheets.
One concrete demand from H.R. 1: states must redetermine Medicaid eligibility every six months instead of annually. That’s not a paperwork adjustment. It means more caseworkers, more administrative processing cycles, and more cost hitting Michigan’s books twice a year instead of once.
H.R. 1 also offloads more SNAP administrative expenses onto states and adds work requirements for both SNAP and Medicaid recipients. Sen. Mary Cavanagh (D-Redford Township) flagged Thursday that the Department of Labor and Economic Opportunity budget already builds in $15 million from the H.R. 1 fund specifically because the committee expects higher caseloads in workforce development. When people lose benefits, they don’t disappear. They show up at workforce programs, and those programs need staff and funding ready.
“We are focused on health, safety, food access, educational opportunities for our people. Those are the lines in the sand,” Anthony said.
That’s a specific list, and it’s deliberate. Anthony drew it in a room where every dollar going toward H.R. 1 compliance is a dollar that isn’t going somewhere else.
According to Michigan Advance, the Senate’s budget proposal doesn’t include tax increases and doesn’t adopt any of Gov. Gretchen Whitmer’s revenue proposals from her own budget plan. That keeps the Senate roughly aligned with the House on the revenue side, even as the two chambers still have distance to cover on spending levels and the overall response to the federal hit.
The practical consequence of the six-month Medicaid redetermination requirement is worth spelling out. More Michiganders cycling through eligibility checks means more people who fall through administrative gaps mid-year, lose coverage for reasons that have nothing to do with whether they qualify, and then have to fight their way back in. States that can’t staff that process absorb the political and human cost of the churn. Michigan’s trying to fund its way to a better outcome.
The School budget component carries its own weight under the K-12 finance structure. Federal cuts to education programs compound the pressure already built into the MDHHS side. Thursday’s committee vote moved both forward. What the full Senate does with them next is the test that matters.
