On February 10, the Governor offered her MI Road Ahead Plan for new and modified investments in transportation which includes a much needed $250 million a year more for public transit. TRU applauds her recognition of the need to invest in the whole transportation system. If implemented, this would fill much of the gap in state transit investment!!
That additional funding is especially needed since on February 5, Governor Whitmer’s budget director presented the administration’s proposed budget for Fiscal Year 2026 with NO additional funding for transit. We’re quite disappointed they’re proposing the same funding levels as last year, without even accounting for inflation, let alone rising costs of operating transit among an aging population.
Ultimately, the Michigan legislature have to vote on a budget and any transportation funding proposals, so please make sure to urge your legislators to support investments in public transit!
Exciting: Governor’s Transportation Funding Proposal Includes Critical New Investments in Transit!
Governor Whitmer has for years sought ways to spend more on Michigan roads. After early proposals failed to gain support, she directed MDOT to borrow money to rebuild and widen Michigan highways. Those funds are now largely depleted and the “road funding crisis” remains.
Her newest proposal – MI Road Ahead Plan – would boost Michigan’s transportation funding by $3 billion a year including $250 million a year for transit and rail! Through a combination of funding shifts and increases, it would boost funding for transit and roads without taking essential funding from Michigan’s schools or cities. TRU supports this important investment in Michigan’s future. Based on the information available so far, it seems the MI Road Ahead Plan would:
- Invest $3 billion more in Michigan transportation every year, including:
- $1 billion more a year for local roads
- $250 million more a year for transit!
- The $3 billion would go through the longstanding Act 51 formula that allocates 10% for transit and rail, raising about $300M. The diversion of the sales tax eliminates about $50M, thus netting about $250M.
- “Ensure that every penny drivers pay at the pump goes toward Michigan infrastructure, investing $1.2B towards roads, bridges, and transit across the state”
- By eliminating the 6% sales tax on gasoline and raising the gas tax by the corresponding amount ($0.19/gallon)
- Hold schools and cities harmless by replacing the funds they currently receive from the sales tax on gas
- Increase Corporate Income Tax (CIT) by about 8%
- Increase internet gaming / sports betting tax
- Raise much needed funds in reasonable ways
- Raise $1.15 billion from new transportation services taxes on retail delivery, TNCs (like Uber and Lyft), taxis, parking lot, shuttles/limos, vehicle towing, and heavy trucks
- Raise $470 million by making marijuana industry pay wholesale instead of point-of-sale taxes
- Add new digital advertising taxes
- Save $500 million in “fiscally responsible cuts as part of a long-term solution” – an area of concern because these cuts aren’t explained
While questions remain, it appears to pass several of TRU’s criteria for a good transportation funding package:
- It invests in the full transportation system.
- Or at least transit, rail, ferries, and senior services.
- Funding for bicycle and pedestrian infrastructure needs funding as well.
- It doesn’t harm other essential investments like schools and cities.
Unless something is changed or clarified, it may not pass other criteria:
- More efficient vehicles may be required to pay a disproportionately high registration fees, unless the package is corrected.
- We strongly recommend the package be corrected to not penalize efficient vehicles.
- Its unclear whether road funding would follow the Fix It First focus.
- We strongly recommend ensuring money won’t be wasted widening highways in a state with a stagnant population that already struggles to maintain the roads we have.
There’s already significant opposition to this from businesses and Chambers so its especially important that people who support smart transportation investments speak out loud and clear.
- Send a message to your legislators urging them to support this important transportation proposal.
- Call the Governor‘s office at 517-335-7858 and let them know you support her transportation funding plan, especially because it would fund transit without taking away from schools or cities.
- Spread the word! Go onto any social media channels you use and applaud this important proposal. If they don’t hear a positive reaction, this new funding may never happen.
Disappointing: Governor Whitmer’s FY26 Budget Proposal Falls Flat on Transit
The Governor recommended flat transit investments that fail to keep up with inflation, let alone the rising costs of providing transit service to an aging and increasingly sprawled population, potentially leaving transit agencies with the lowest local bus investment rate in seven decades!
The Governor proposes to continue to spend nearly $7 billion next year on transportation, including $211 million more than this year for roads. Yet while she points to “$767 million in ongoing support for transit and rail,” that would actually be less than the state invested in transit this year.
The administration’s FY26 budget (which starts Oct 1, 2025, proposes for transit:
- $226 million for Local Bus Operating
- LESS than last year, by eliminating one-time funding
- $250 million for Transit Capital
- LESS than last year
- $147 million for Rail operations and infrastructure
- LESS than last year
- Flat funding for other transit-related investments
- $30.3M for specialized services
- $20.9M for service initiatives
- $20.5M for marine passenger
- $9.7M for intercity passenger
- $2M for municipal credits
Costs for operating transit continue to increase and some transit agencies are expanding their service. Combined with flat or declining state funding, that means Michigan’s transit agencies would be facing the lowest state reimbursement level in decades, if the state budget doesn’t significantly improve.
The House and Senate will each develop their own budget proposals, then all three will need to compromise on a final budget, which could last will into the summer. So this fight has truly just begun.
Speaker Hall’s Road Funding Proposal Fails Michigan’s Needs
A few weeks prior, new House Speaker Matt Hall outlined a road funding proposal he claims would raise $3.1 billion without raising taxes. It however neglects the rest of the transportation system and it takes funding away from other important state investments with only vague statements that the funding would be restored elsewhere.
Michigan can’t afford to continue to rob Peter to pay Paul. Nor can we fund just part of the transportation system while other parts crumble.
Clearly the transportation funding debate has only just begun. Transit supporters need to be loud and clear in stating that Michigan leaders need to fix the whole transportation system and can’t gut other priorities.
Stay tuned for updates and other ways to get involved.