The state budget was finalized in the legislative session that began Thursday, Oct. 2, and ended in the morning hours on Friday, Oct. 3. The budget retains statutory revenue sharing to be funded for all townships at the fiscal year 2025 level, but constitutional revenue sharing is reduced by approximately 6.3% for the new state fiscal year. This reduction comes as part of the budget/road funding deal adopted early Friday morning that will remove the state’s sales tax, effective Jan. 1, 2026, from the sale of fuel at the pump, negatively impacting constitutional revenue sharing. This decreases the originally anticipated sales tax revenues available for distribution under constitutional revenue sharing by $63 million in FY 2026 for townships, cities and villages, as no backfill was provided for the loss to local units of government.
Under the budget, statutory revenue sharing, which was returned to hundreds of townships in FY 2025 after nearly two decades of state funding, will remain flat for the state’s new FY 2026. You can view your township’s City, Village and Township and constitutional revenue sharing estimates for FY 2026. Please note these are preliminary estimates and subject to change.
Funding for a new public safety revenue sharing grant was included in the budget with $35 million annually available for three years to townships, cities and villages and an additional $7.5 million one-time funding. You can view your township’s preliminary FY 2026 public safety estimates; note the local unit calculation is based on the average of the two highest annual violence crime counts over the last three years in the crime report submitted by your township to the Michigan State Police. The funds must be used only for the operational and capital expenditures for public safety purposes. Of the amount, 75% must be used to fund directly or indirectly law enforcement agencies or officers. Up to 25% may be used to fund other non-law enforcement-related public safety initiatives, such as improving recruitment or retention efforts, training programs, equipment purchases, programs designed to reduce identified risks to public safety, crime diversion programs, operational emergency medical or firefighter services, and capital improvements to public safety buildings/structures. MTA will share additional details when available on reporting timelines and requirements.
The budget includes one-time funding of $8 million to assist with the purchase of fire equipment or fire gear for firefighters. From this amount, $4 million must be distributed to local units of government with predominately on-call, part-time or volunteer fire departments. MTA will share additional details on applying for these funds when available.
Additionally, an increase of $13.4 million was included in the budget for lead service line removal and replacement, as well as $34 million in one-time funding for grants and loans to support local government water infrastructure projects.
MTA thanks all members who contacted their legislators during the last two weeks to preserve constitutional revenue sharing revenues.