As the federal government in D.C. stares down the possibility of a government shutdown in the coming weeks, the state government in Lansing finds itself in a similar situation. After two years of a Democratic trifecta, Republicans won the Michigan House of Representatives in 2024 as Democrats retained the state Senate. Now, the divided legislature must agree to a budget that the governor will sign before the new fiscal year begins on Oct. 1.

Both legislative chambers passed their own versions of the budget earlier this year. However, the funding differences, particularly for education and infrastructure, could prove irreconcilable and cause a government shutdown. As a baseline, the current Michigan budget approved in 2024 totaled about $82.5 billion. Governor Gretchen Whitmer’s budget proposal totaled $83.5 billion, including $3 billion for the governor’s commitment to “fix the damn roads”. The Democrat-controlled Senate passed a budget with an even higher total of $84.6 billion. By contrast, the Republican-controlled House passed a budget of $78.5 billion, a significant reduction from both the Democrat proposals and the current budget. Republicans claim that their budget will cut spending by targeting “waste, fraud, and abuse” in the state government. Democrats counter that increased spending is needed to address uncertainty caused by tariffs and federal funding shortfalls in the One Big Beautiful Bill.

Michigan has briefly shut down twice in modern history, in 2007 and 2009. It is unclear what a government shutdown in Michigan would look like exactly, but estimates indicate two-third of the 50,000 state employees could be temporarily laid off, parks and liquor stores could close, and school districts may have to take short-term loans. Though most expect a budget to be passed eventually, the details of which side concedes to the other in negotiations could affect campaigning in the 2026 elections.