In the early morning hours of Friday, July 3rd, the Michigan Legislature passed the FY 2026-27 Budget. MDOT’s total budget grew by $226M. Unsurprisingly, most of this goes to roads, but transit still got some small progress.
LBO matches inflation
Local Bus Operating, which funds local bus service in your community, did increase to $305M, up $33.4M from last year. This amount is roughly equal to inflation, meaning the state will continue to fund about 29.5% of the budget for urban transit agencies and 34.5% for rural agencies.
While the $305M for LBO is below the governor and senate recommended $315M, and our ask for $330M, it is above the House proposal and is understandable in context. Federal cuts to Medicaid and other programs resulted in Michigan having an over $1B hole in the budget. Some departments, such as EGLE and LEO, saw major cuts to their budgets, and numerous programs had their funding cut.
IPAF funding included
Additionally, the $65M Infrastructure Projects Authority Fund (IPAF, aka transformational transit), which was included in last year’s roads deal but not funded, got funding this year. MDOT has accepted initial applications for projects, and are currently evaluating which projects to fund. IPAF projects are intended to be “transformational capital transit projects, with 1-3 years of state operating support behind them”, and can include things like BRT, regional express buses, bus lanes, or other technological improvements.
Budget is… ok, but not great
Overall, the budget is not great, but not very disappointing. It’s understandable transit was not fully funded amidst record inflation, a major cost of living crisis, a $1B hole in our budget due to federal cuts, and medicaid cuts affecting hundreds of thousands of Michiganders. We’ll continue to fight for more and better transit funding in our state, but this fight will continue next budget cycle.
Thank you to each and every person who came out for our Transit Day at the Capitol with MPTA and ATU. Our advocacy meant that no transit cuts occurred this year, and we thank you for your time and effort! Without you, none of this would be possible.
Find the full passed budget from the State of Michigan.
