States Finalize FY2026-27 Budgets Amid Divided Legislatures and Partisan Debate

In 2026, multiple U.S. states completed budget processes for fiscal year 2026-27. Michigan's Legislature, divided between a Republican-majority House and Democratic-controlled Senate, passed a $75.2 billion budget (with some reports citing a total state spending figure near $85 billion) after a roughly 19-to-24-hour overnight session ending July 3, missing the self-imposed July 1 deadline by three days. Governor Gretchen Whitmer, in her final budget before leaving office due to term limits, signed the bill, which included about $19.8–20 billion for schools, a $14.1 billion general fund, no new taxes, continued road funding, and investments in literacy, housing, and health care. North Carolina Governor Josh Stein signed a $34.4 billion budget (Senate Bill 257) on July 7, 2026, citing teacher and law enforcement pay raises and Medicaid funding, and vetoed a homelessness-related bill (HB437) on July 8; lawmakers adjourned but scheduled a return for July 27 to address vetoes and pending bills, including an election law overhaul (HB958). Separately, Illinois Governor JB Pritzker signed a $55.9 billion FY2027 budget on June 16, 2026, the largest in state history, including new business taxes and item/reduction vetoes to correct drafting errors, such as removing an erroneous $500 billion line item and cutting a youth employment program from $60 million to $30 million. Washington's Legislature passed an $80 billion budget in March 2026 that included a new tax on income above $1 million and a 1% administrative spending cut for most agencies. Michigan's budget was reported as roughly $1 billion less than the prior fiscal year, while North Carolina's process included over a dozen additional bills sent to the governor alongside the budget. All four states' budgets have been signed into law, though North Carolina lawmakers remain scheduled to reconvene July 27 to address vetoes and unresolved legislation, including HB437, HB171, and SB50. Political reaction varied: Illinois House Republican Leader Tony McCombie criticized new business taxes as contradicting affordability messaging, and Washington state Senator Chris Gildon criticized that state's budget for relying on new taxes and increasing spending. Michigan's budget passage was described by multiple outlets as bipartisan despite the divided legislature, though the exact overall spending figure—$75.2 billion versus approximately $85 billion—was reported inconsistently across sources and remains unresolved.