After several weeks of negotiations between legislative leaders and a marathon session on July 2 and 3, the Legislature finalized action on the state’s FY 2026-2027 budget. As MTA shared on July 3, although the Legislature missed the statutory deadline of July 1, the budget was approved before the Independence Day holiday. The total topline omnibus budget, which did not account for federal dollars, was an estimated $750 million smaller than the current year’s budget, dropping the total spending to $75.2 billion and a flat General Fund of $14.1 billion. With an estimated $1.4 billion in federal funding, the budget would be approximately $200 million higher. The budget reflects a relatively flat revenue picture in the state combined with federal reductions to state funding, and does not include any tax increases or funding withdrawals from the state’s rainy day fund (Budget Stabilization Fund).
For revenue sharing, the budget includes $333 million for statutory revenue sharing for townships, cities and villages and $291 million for counties. This maintains the current year’s appropriation level. For constitutional revenue sharing, which is determined by actual sales tax revenue collections, the projected decrease is 2.3% ($25 million) based on the most recent (May 2026) state revenue estimates and continues to reflect the loss of sales tax revenue due to the 2025 transportation funding proposal.
Public Safety Revenue Sharing (PSRS) grants are included for a second year and will be funded at $50 million, of which $35.1 million is distributed to cities, villages and townships (CVTs) based on their violent crime statistics. In the current year, $50 million was appropriated with an additional one-time funding of $20 million; CVTs received a total of $42.5 million this fiscal year. This budget, which begins on Oct. 1, contains the $50 million—thus, local units will see a slight decrease in the PSRS grants.
Estimates (from the Senate Fiscal Agency) for your township’s statutory and constitutional revenue sharing, as well as projected Public Safety Revenue Sharing grant, can be viewed here.
The FY 2026-2027 budget agreement also included 135 legislatively directed spending items (LDSIs) totaling $125.3 million. Of those items, 24 of the LDSIs will benefit townships, worth a total of $26.4 million.
In addition to the budget, the Legislature approved 70 policy bills, 66 of which were part of the budget agreement (those impacting townships are included in the articles below). While approved unanimously earlier this year by the Senate, the Revenue Sharing Trust Fund was unfortunately not part of the policy measures included in the final budget agreement. MTA and other local government organizations plan to continue our work on this issue.