Gov. Whitmer to address Michigan’s economy as possible state and federal shutdowns loom

LANSING, Mich. (AP) — Three years ago, the story of Michigan was one of Democratic success. Gov. Gretchen Whitmer and Democratic state lawmakers held complete control of the executive and legislative branches of government.

This year, the story of Michigan is one of enormous partisan divide.

Partisan politics have resulted in a monthslong legislative stalemate over the state budget that might send Michigan into a government shutdown. Whitmer, who is in her second-to-last year as governor, is expected to call on state lawmakers to break the deadlock in a speech Tuesday focused on Michigan’s economy.

The standoff has high stakes for Whitmer and the state, which is particularly influenced by broader economic trends in the U.S. It’s also a glimpse at partisan politics reaching far beyond Washington, D.C., that are grinding a battleground state’s Capitol to a halt.

The risks for Whitmer and Michigan

Ahead of her address, Whitmer said tariffs and the uncertainty they have created have hit Michigan’s manufacturing sector particularly hard. With a federal shutdown looming as the state also faces down a shutdown deadline, Whitmer says that elected leaders “must set aside politics.”

“In Michigan, that includes passing a balanced, bipartisan budget that lowers costs, invests in education, health care, public safety and roads,” she said last week.

Whitmer has been floated as a potential Democratic nominee for president. But she has taken a less combative approach to her working relationship with President Donald Trump compared to other contenders including California Gov. Gavin Newsom and Illinois Gov. JB Pritzker.

At home, her best-known campaign priorities are on the line.

Whitmer’s budget package includes what she calls a $3 billion plan creating a sustainable source of funding for roadway and infrastructure repairs. Both of her campaigns for governor were centered on the idea and her catchphrase promise to “ fix the damn roads.”

Previous policy has fallen short in a few key areas, including funding for local roadways.

The Republican House passed its own road plan with key differences. The Democratic-led Senate has not presented a plan for long-term funding in their budget and have held out on doing so as overall negotiations continue.

State and federal shutdowns loom

State officials expect a budget will be passed eventually. The question is when and who will make concessions.

The state’s new fiscal year begins Oct. 1. If there is no budget in place then, the government enters a shutdown. Congress also faces an impending shutdown at the end of the month.

Michigan last entered a government shutdown during economic crisis in 2007 and 2009. Both lasted only hours.

This year’s deadlock is fueled by diametrically opposed lawmakers and no shortage of bad blood between the new Republican-led House and the Democratic-led Senate.

Fueled by support for Trump in Michigan in the 2024 election, Republicans gained a majority in the state House. Since then, the chambers have constantly feuded.

They’ve taken up very little legislation passed over from the opposite chamber, and only 12 bills have been signed into law this year. The Senate has sued the House over bills from the previous year that House leadership have not passed on to the governor for her signature.

In more congenial times, state appropriations chairs hash out details of the budget along with the leaders of the four legislative caucuses. But this year, negotiations have largely centered on Whitmer, Senate Leader Winnie Brinks and the new House speaker, Matt Hall.

Whitmer has not muddied her hands all that much in the course of the budget talks. But Brinks, who led the Senate in its Democratic trifecta years, and Hall, a MAGA Republican, have made no secret about their disdain for the other’s politics. Brinks and Hall have continuously labeled the other as unwilling to meet and say the opposite chamber’s budget contains numerous nonstarters.

Whitmer herself faced criticism after taking a trade trip to Japan, Singapore and Germany earlier this month, just weeks before the budget deadline.

The deadlock over the state budget has also served as a messaging battle between the two chambers, whose members are looking ahead to the 2026 elections. Democrats claim Republicans have deliberately slow-walked the process to further their own agenda while Republicans claim Democrats are ballooning state spending.

Shutdown details are murky

The consequences of a prolonged shutdown are fuzzy. Whitmer’s office and the state budget office have provided little public information.

“While we have begun contingency planning for different scenarios, it’s still too early in the process to determine what a shutdown would look like,” said Lauren Leeds, spokesperson for the state budget office.

It’s unclear how many state employees may be out of work, but in 2019 when Michigan briefly neared a shutdown under Whitmer, about 30,000 state employees, or 62%, faced temporary layoffs. That number did not include workers deemed essential such as prison guards, state troopers and Child Protective Services caseworkers.

Secretary of State offices that handle driver’s licenses and registrations would close along with state parks and rest stops. Liquor in Michigan is sold through a state commission, and judging by 2019 precedent, approval for retail sales would cease.

Only two states did not enact a budget by the start of their fiscal year — North Carolina, where lawmakers passed a stopgap spending plan, and Pennsylvania — according to the National Conference of State Legislatures. In Pennsylvania, lawmakers have still not broken out of the impasse, spelling financial distress for schools and counties that rely particularly heavily on state funding.

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Associated Press staffers Gary Robertson in Raleigh, North Carolina, and Marc Levy in Harrisburg, Pennsylvania, contributed to this report.