Benson Inherits Michigan Budget Gaps Amid Housing and Healthcare Pressures
The governor-elect faces $2 billion in projected Medicaid shortfalls and rising energy costs, with no detailed funding plan for key proposals.
By Samir Doyle ·
Jocelyn Benson became governor-elect on Wednesday and immediately turned to the state's pressing financial and social deficits. Her administration will inherit a budget constrained by federal changes and a workforce facing rising costs for essential services.
Michigan’s median household income sits near $73,000, roughly 10 percent below the national average. The state’s manufacturing sector, its largest economic driver, continues to lose jobs. A survey of more than 6,400 residents identified housing and healthcare as top concerns, noting that median wages have not kept pace with the cost of materials and financing for new construction.
Benson proposes a $5,000 caregiver tax credit, a healthcare affordability board, and expanded homestead property tax credits. The caregiver credit alone would have cost the state $37 million under the previous administration's budget calculations. She has not outlined a specific source of revenue to fund these initiatives, despite recent years of tight state budgets.
The healthcare sector faces a $2 billion shortfall beginning in January. New federal rules require Medicaid recipients to work 80 hours per month or prove inability to do so, a change expected to cost the state significantly. Approximately 690,000 Michiganders carry medical debt, and premium rates for individual and small group plans are rising by an average of 14.2 percent and 9.6 percent, respectively.
Benson plans to create an independent board to review prescription drug prices and expand mobile health units to rural areas. She stated that these units would provide low or no-cost preventative services to communities affected by hospital closures. However, many of these costs stem from federal policies beyond the governor's direct control, and previous legislative attempts to pass a drug pricing board failed despite Democratic majorities.
The state is also grappling with an influx of hyperscale data centers. At least 18 proposals are currently on the table, many benefiting from tax exemptions passed in December 2024. Benson has called for a moratorium on new data centers until communities have a say in the process. She wants to ban tax breaks for these projects and require them to pay for the power they use, though she has not defined the specific guardrails for this pause.
Democrats now control both chambers of the state Legislature, giving Benson a path to advance her agenda. However, the tax breaks for data centers were passed with Democratic support, meaning current lawmakers would need to reverse their previous votes. The state also faces a housing crisis that Dan Gilmartin of the Michigan Municipal League described as lacking a comprehensive response despite ongoing discussion.
Benson also pledged to voluntarily open her office to the Freedom of Information Act on her first day in office. Her predecessor, Gretchen Whitmer, made a similar promise in 2018 but did not implement it. Benson cited election security and transparency as key priorities, calling for cooling-off periods before former lawmakers can become lobbyists.
