Covering what's hot this week or could affect you and your business.
Still no state budget ... but no Michigan shutdown either?
What's happening: Today marks the start of Michigan’s new fiscal year, but the state enters it without a finalized budget — operating instead on a one-week continuation plan to keep government running while negotiations continue.
Discussions were ongoing yesterday between the House, Senate and Governor to come to a resolution — only to pass a stop-gap measure in the early morning hours to prevent a government shutdown with promises to resume conversations today.
At 2 a.m. the Legislature adopted what is being referred to as a continuation budget to fund government for 1/52 of the year.
House Bill 4161 (Bollin) was originally passed by the House Republicans earlier this year as an attempt to demonstrate what a “no frills” budget would look like and allow state government to operate while negotiations were ongoing concerning road funding and other big-ticket items. Now, in a turn of events, the bill was indeed used to support interim spending to keep state lights on, doors open and employees paid.
What they’re saying: Information from inside the Capitol indicates there are still talks in earnest to have a budget passed by Thursday, Oct. 2.
Majority Floor Leader Bryan Posthumus is quoted as saying “[...]he budget is done and agreed upon. And this is the process: A couple days to draft it; we expect to be able to vote, hopefully sometime Thursday; couple days to get it to presented to the governor; and three days for a review to take place.”
What we’re saying: While we are encouraged by the progress made toward a bipartisan agreement, the lack of transparency and finality in the budget process makes it difficult to assess the full impact on Michigan’s economy, employers and workforce.
We remain particularly concerned about the business tax increases embedded in the current framework and their potential to undermine Michigan’s competitiveness.
Our top concern: One of the most consequential — and controversial — elements of the proposed budget framework is House Bill 4961 (Bollin), which would "decouple" or separate Michigan’s tax code from recent federal tax changes enacted under the One Big Beautiful Bill Act (OBBBA).
That change means Michigan employers — including small businesses — would permanently lose access to federal deductions and credits at the state level.
First-year impact: $677 million in new taxes.
Long-term impact: Michigan’s competitiveness and job growth would be at risk.
⚠️ The Chamber is actively advocating for a five-year sunset clause to prevent this tax hike from becoming permanent and minimize the impact to Michigan's employers and the state's long-term economic competitiveness.
What’s next: Our advocacy team will:
Continue closely monitoring negotiations as they unfold this week.
Focus on programs that matter to employers, including Going PRO Talent Fund, permitting reforms and contaminated site clean-up.
Keep members updated in real time.
👉 Questions or concerns? Contact our advocacy team — we’re here to help.
Meanwhile, in Washington …
What's happening: While Michigan lawmakers work to finalize a state budget, the federal government officially shut down today.
Why it matters:
Federal services Michiganders and businesses rely on — from permitting to contracts — will see disruption.
Uncertainty in Washington adds to the economic unease as our state budget remains unfinished.
Our view: Stability matters. Families and businesses cannot afford disruption at any level of government. The U.S. Senate must act quickly to pass a clean continuing resolution and restore certainty.
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