In a dramatic late-night session on October 3, 2025, Michigan lawmakers finalized a sweeping state budget that promises historic investments in education and infrastructure, while igniting controversy with a new tax on marijuana sales to fund road repairs. The package represents a rare bipartisan compromise, with both parties claiming victories and voicing concerns as the dust settles in Lansing.
At the heart of the new budget is a record-setting commitment to Michigan’s K-12 schools. State Representative Tim Kelly, chair of the House Appropriations Subcommittee on School Aid and the Department of Education, unveiled the details with visible pride. “This is not just a number in a budget book,” Kelly declared, according to Michigan House Republicans. “It is teachers supported in their work, textbooks in the hands of students, meals for children who arrive hungry, buses to carry them to class, and tutors to help them succeed. It is Michigan investing in its children.”
The numbers back up his enthusiasm. The per-pupil foundation allowance will rise to $10,050—the highest in state history—marking a $442 increase after last year’s funding freeze. For the first time, cyber charter schools will receive funding at full parity with their brick-and-mortar counterparts, a move supporters say reflects the growing role of virtual education in the state.
The budget also takes a bold step in addressing student safety and mental health. A total of $321 million is earmarked for per-pupil safety and counseling grants, new school resource officers, and additional mental health professionals. “A child cannot learn if they do not feel safe, and they cannot thrive if they suffer in silence,” Kelly stated. “This investment ensures stability and protection are treated as the foundation of learning.”
Other educational highlights include a 25% increase in at-risk funding, bringing the total to nearly $1.3 billion, $65 million to reduce class sizes in the early grades, and $70 million for new “grow-your-own” teacher programs aimed at addressing chronic educator shortages. School infrastructure will receive a $100 million boost, and $70 million is set aside to expand career and technical education in underserved regions.
But the budget is more than just dollars and cents—it comes with reforms designed to improve transparency, limit the number of virtual school days, and guarantee that funds flow directly into classrooms instead of administrative overhead. “Michigan ranks near the bottom nationally in reading, math, and graduation rates,” Kelly acknowledged. “This budget begins to turn that tide. It demands accountability while delivering the tools our schools need to succeed.”
Kelly also emphasized the difficult negotiations that led to the final agreement. “Reaching this agreement required persistence and resolve, but the result is stronger because of it,” he said. “We cut waste, redirected dollars into classrooms, and spared families from the tax hikes Democrats demanded. The future of Michigan depends on what happens inside our schools, and this budget makes clear that we will no longer accept mediocrity. We are demanding excellence for every child.”
While education grabbed headlines, the other major pillar of the budget—roads—proved just as contentious. Michigan’s notoriously potholed highways and byways have long been the subject of voter frustration and political wrangling. This year, lawmakers settled on a new approach: leveraging a 24% wholesale tax on marijuana sales to fund future road work.
According to the Detroit Free Press, the Senate narrowly approved the marijuana tax in a 19-17 vote shortly after 3 a.m. on October 3, following a 78-21 House vote on September 25. The tax is projected to generate $420 million annually for a new Neighborhood Road Fund and to cover the costs of implementing the plan. “Together, the changes are expected to increase annual road funding by $1.5 billion to $1.8 billion per year,” House Speaker Matt Hall said at a recent news conference.
The road funding package doesn’t stop at marijuana taxes. It also redirects corporate income tax revenues and eliminates the 6% sales tax on fuel, making way for a 20-cent-per-gallon hike in the fuel tax. Lawmakers say this maneuver will leave the price at the pump roughly unchanged, while providing a much-needed infusion of cash for infrastructure repairs.
Passage of the overall budget was decisive: 101-8 in the House and 31-5 in the Senate, with the school aid package approved by even wider margins. But the marijuana tax, in particular, exposed sharp divisions. Voting records published by Michigan Votes reveal that 78 House members—including both Republicans and Democrats—supported the tax and road plan, while 21 opposed it. The Senate vote broke down along similar lines, with 19 in favor and 17 against. Eleven House members and one senator did not vote.
Proponents of the marijuana tax argue it’s a creative solution to the state’s infrastructure woes, tapping a new and growing revenue stream without raising traditional taxes on working families. However, critics warn the move could backfire. Some lawmakers and industry advocates fear the hefty tax will drive consumers back to the illicit market, undermining the legal marijuana industry already struggling with falling prices. “The tax will benefit illicit drug dealers as customers are pushed out of the legal commercial market, and damage a Michigan pot industry already facing plummeting marijuana prices,” critics argued, as reported by the Detroit Free Press.
The debate over the marijuana tax also exposed ideological rifts within both parties. While many Republicans supported the measure as a pragmatic fix for roads, others balked at what they described as a punitive levy on a still-maturing industry. Some Democrats, meanwhile, worried about the impact on social equity and the possibility that higher prices could disproportionately affect low-income consumers.
Despite the controversy, the budget’s passage marks a rare moment of bipartisan achievement in an era of fierce political polarization. The state’s leadership, including Governor Gretchen Whitmer, is expected to sign the package into law in the coming days.
For Michigan residents, the new budget offers both immediate and long-term changes. Students and teachers will see more resources in classrooms, while drivers may finally get some relief from the state’s battered roads. The marijuana industry, meanwhile, faces a new set of challenges as it adapts to the higher tax burden.
As lawmakers prepare to implement these sweeping changes, all eyes will be on the results: Will Michigan’s schools climb the national rankings? Will the state’s roads finally shed their reputation as some of the worst in the country? Only time will tell, but one thing is clear—the stakes have never been higher for Michigan’s future.