Michigan Gov. Gretchen Whitmer, center, holds up signed legislative pieces of the 2025-26 road funding deal that was the culmination of the budget cycle, surrounded by lawmakers and local Macomb County officials. Whitmer signed several tax bills to fund the package Monday in Clinton Township, Mich. (Photo courtesy of the Executive Office of the Governor, via Michigan Advance)

A hard-fought deal to fund road repairs in perpetuity was inked Monday morning, cementing a legacy item for Michigan’s governor who campaigned tirelessly on “fixing the damn roads.”

But two of the primary tax revenue sources in the plan face distinct political and legal headwinds that could scuttle the roads deal even after it became law by way of Gov. Gretchen Whitmer’s pen.

The governor, along with House Speaker Matt Hall, R-Richland Township, several other lawmakers and local officials, signed the budget’s multi-pronged road funding pieces in Clinton Township on Monday morning, each donning high-visibility worksite gear and hardhats.

For Whitmer, the signing was not just the normal ceremonial fare – Whitmer’s win list was always missing a legislatively funded roads deal, despite her efforts to fix the state’s roads through her executive office and a clever bonding program.

“I ran on fixing the damn roads, and I’m proud to keep my promise and get it done,” Whitmer said. “This year’s balanced, bipartisan budget makes a record, nearly $2 billion annual investment to fix our state and local roads, which will make everyone’s drive safer and faster. We’re getting this done by ensuring every penny you pay at the pump goes towards our roads. I’m so grateful to legislators on both sides of the aisle for coming together to get this done so we can build reliable roads that last for decades while supporting tens of thousands of good-paying local jobs.”

In all, Whitmer signed seven pieces of legislation to make the road plan work. They include:

— House Bill 4180, sponsored by Rep. Donnie Steele, R-Orion;

— House Bill 4181, sponsored by Rep. Steve Frisbie, R-Battle Creek;

— House Bill 4182, sponsored by Rep. Bradley Slagh, R-Zeeland;

— House Bill 4183, sponsored by Rep. Tom Kunse, R-Clare;

— House Bill 4951, sponsored by Rep. Samantha Steckloff, D-Farmington Hills;

— House Bill 4961, sponsored by Rep. Ann Bollin, R-Brighton; and

— Senate Bill 578, sponsored by Sen. Veronica Klinefelt, D-Eastpointe.

Hall, a Republican leader who found himself seeing eye-to-eye with the Democratic governor on several key budget items this year, called the funding the “biggest roads deal in history,” and a “very big deal for Michigan’s future.”

“We eliminated waste, fraud and abuse in the budget and made smart reforms to make sure the money went to our top priorities,” Hall said. “Our plan finally ensures every penny you pay at the pump goes to road funding, something people have demanded for years. And it sends that money to the local roads and bridges in our neighborhoods, instead of just state highways. Those reforms will make our roads smoother and make life better for the people of Michigan.”

Senate Majority Leader Winnie Brinks said the budget cycle made the Legislature face unprecedented challenges, but it also gave lawmakers an opportunity to show the rest of the nation how the government can still work for residents in the face of deep political divisions.

“The result: a bipartisan budget that fixes our roads, strengthens public schools, protects health care access, and insulates us from some of the toughest federal cuts,” Brinks said. “Michiganders and their communities stand to benefit both immediately and into the future because of the groundwork we are laying today.”

Macomb County Executive Mark Hackel, who was present at the signing, said that together, with his county’s partners in the Legislature and Whitmer, they are investing in the infrastructure and assets that will move the state forward.

“With a new, sustained pool of funding, we will enhance our efforts to fix local roads,” Hackel said. “This is a major accomplishment and will make the drive to work or back home smoother and safer for the people of Macomb County.”

The victory lap was warranted after Whitmer fought so long for a legislative roads funding fix, even if it came with some concessions for departmental cuts and needing to find new revenue.

Still, at least two of those funding pieces could be shaky ground as the wheels of the new budget start spinning.

House Bill 4951 enacts a 24% wholesale tax on cannabis products, while House Bill 4961 decouples the state and federal tax codes, blunting the immediate effects of President Donald Trump’s new federal tax cuts.

In the case of the marijuana tax, the policy has been denounced by members of the Michigan cannabis industry and is now the subject of a lawsuit over its passage and impending implementation. If the lawsuit is successful, the tax leaves open a $420 million pothole in the road funding deal.

The decoupling issue is causing heartburn for businesses that were hoping for tax relief on the research and development front, which was anticipated to spur capital growth for innovation. Business groups are now working behind the scenes to lobby the Legislature for changes that would allow some of those tax benefits to reach Michigan sooner than the five-year timeline signed into law Monday.

Any major scuttling of the decoupling plan could mean a massive hole in state revenues, which is why Democrats fought hard to include it in the final budget deal.

Tyler Theile, vice president and director for public policy with East Lansing-based Anderson Economic Group, in an interview with Michigan Advance, said that would be the unfortunate position the state would find itself in if both taxes failed or were heavily altered.

“It makes me think of the phrase, ‘use it up, wear it out, make a do or do without,'” Theile said. “We really might have to figure out how to operate some programs more efficiently.”

In a news conference after the budget cycle’s completion, Hall said he’s already eyeing next year’s spending plan and that the House GOP was already contemplating deeper cuts, setting up a potential situation where future reductions would serve to plug holes where either of the controversial 2025-26 taxes might have faltered.

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