Michigan League for Public Policy | October 2026
Michigan families succeed when they can afford the basics and have their unique needs, like healthcare, housing, childcare and education, met. However, Michigan’s tax structure is inequitable and insufficient, meaning budget priorities are pitted against each other and leading to long-term disinvestment in our communities. Policymakers need to take a look at Michigan’s revenue system and support sustainable, sufficient and equitable tax changes.
Strong revenues help us invest in…
- Safe Roads and Bridges
- Accessible Public Transit
- High-quality Education
- Clean Drinking Water
- Affordable Housing
- Healthy Families
Michigan Policymakers Should…
- Allow and implement a graduated income tax and targeting tax relief, like a state-level Child Tax Credit, to families most in need.
- Extend our state sales tax to services.
- Tax vape and increase taxes on tobacco to support health programs.
- Tax wealth such as capital gains or intergenerational wealth transfers.
- Allow the option for local governments to tap into different sources of revenue.
- Review our tax code for ineffective or unnecessary tax expenditures.
Michigan’s Tax System is Inequitable
The heavy reliance on sales and property taxes as well as a flat income tax means Michigan households in the lowest income quintile — earning less than $21,300 per year — pay an effective tax rate at 7.1% while the highest-earning households — those earning over $670,300 — spend the lowest at an effective rate of only 5.7%. At the same time, tax changes over the past two decades have shifted the burden from businesses to families. Since 2011, business taxes have made up a smaller share of General Fund revenue; before the 2011 tax reforms, approximately 20% of GF/GP revenue came from business taxes, but this has shrunk to less than 10%.
Chart: Michigan’s highest income earners pay the lowest effective tax rate
Share of total (non-elderly) family income.
| Income group | Average tax as a share of income |
|---|---|
| Less than $21,300 | 7.1% |
| $21,300 to $43,200 | 9.0% |
| $43,200 to $77,300 | 9.7% |
| $77,300 to $135,000 | 9.7% |
| $135,000 to $260,300 | 8.6% |
| $260,300 to $670,300 | 7.4% |
| Over $670,300 | 5.7% |
Source: Institute on Taxation and Economic Policy, 2024.
This also deepens racial inequities that harm Black communities, which have lower incomes and less generational wealth due to the racist policies of governments and institutions. Historically, this includes policies like redlining to deny Black families access to neighborhoods; in the present day, this includes mortgage discrimination, wherein banks deny mortgages to Black applicants at nearly twice the rate of white applicants.
Michigan’s Tax System is Insufficient
Since 1979, Michigan’s total state and local tax revenue as a percentage of personal income has fallen from nearly 11% to just over 8%; Michigan now ranks in the bottom third of states in total tax “burden.” If Michigan taxed itself at the same level as it did in 2000, our Fiscal Year 2026-2027 state budget would have more than $14 billion more to support childcare, healthcare, food access, safe housing and quality education.
Ultimately, inaction on revenues coupled with regular tax cuts has meant our largest budget sources—our School Aid Fund and our General Fund—have failed to keep up with inflation, forcing the state to do more with less. Adjusted for inflation, Michigan’s School Aid Fund is only marginally above levels set in 2000; what’s worse, our state General Fund—Michigan’s only unrestricted revenue fund—is estimated to be nearly 26% below the level set in 2000.
Chart: Michigan is not a high-tax state
State and Local Taxes (SALT) as a percentage of personal income, Michigan ranks below all other Great Lakes states.
| State | National rank |
|---|---|
| Illinois | 7th |
| Minnesota | 13th |
| Indiana | 25th |
| Ohio | 31st |
| Wisconsin | 33rd |
| Michigan | 38th |
Source: Michigan Senate Fiscal Agency
Inequitable and Insufficient Revenues Pit Priorities Against Each Other
State lawmakers are already facing tight budgets; what’s worse, the federal government is pulling back resources and leaving states to fend for themselves. Essential programs with proven track records at helping Michiganders make ends meet, improving health outcomes, helping children and young adults access quality education and strengthening our workforce are already having to compete for dollars because there aren’t enough to go around.
Chart: In FY 2026-2027 budget, about $13 billion has been diverted away from K-12 to fund postsecondary education since 2010
FY 2026-2027 represents a record $1.75 billion in School Aid Fund (SAF) to support postsecondary education.
The chart shows dollars diverted from the SAF each year from 2010 to 2027, split between community colleges and higher education. In 2010, about $200 million was diverted, all to community colleges, and none was diverted in 2011. Yearly totals stayed between about $400 million and $650 million from 2012 to 2018, then reached about $900 million in 2019 and about $1.1 billion in 2022. After falling to about $925 million in 2025, the total rose to about $1.35 billion in 2026 and $1.75 billion in 2027. Of the 2027 total, about $500 million went to community colleges and about $1.25 billion to higher education. Amounts other than the $1.75 billion are approximate.
Source: House Fiscal Agency, MLPP analysis of enrolled budget
Michigan League for Public Policy | info@mlpp.org | www.mlpp.org | 101 S. Washington Sq., Suite 820 Lansing, MI 48933
Maisha Massey is a Detroit native, educator, researcher and advocate committed to creating more equitable experiences for young people and the communities that support them. She currently teaches 11th-grade English Language Arts in Detroit Public Schools Community District and serves as a TeachMichigan Michigan Education Policy Fellow. Maisha holds a master’s degree in Educational Leadership and is currently pursuing her Ed.D. in Educational Leadership and Policy Studies at Wayne State University, where her research centers the experiences of Black girls in schools. Her work is grounded in the belief that meaningful policy should be informed by the voices and lived experiences of the students, educators and communities most impacted by it.
Betsy Zobl-Tar 
Jay Cutler joined the League in March 2026 as the Kids Count Senior Data Analyst, where he collects, analyzes, and prepares data for Kids Count in Michigan.
Danielle Taylor-Basemore joined the League as the Development Data and Stewardship Coordinator in June 2025. She brings with her five years of nonprofit experience with a special focus on community engagement, data visualization and strategic programming. Prior to joining the League, Danielle served as the Business District, Safety, and Digital Manager at Jefferson East, Inc.
Scott Preston is a Senior Policy Analyst with the Michigan League for Public Policy, where he leads the organization’s immigration and criminal justice reform portfolios. In the three years prior to joining the League, Scott facilitated the Southeast Michigan Refugee Collaborative and managed a small business economic development program at Global Detroit. His work included launching Michigan’s first Refugee Film Festival and building on a trusted connector model that linked marginalized communities with crucial resources. Scott’s work at the League is informed by his background in journalism and research. He spent four years covering the Syrian refugee crisis in the Middle East for publications such as The Economist, and later worked with unaccompanied refugee minors through Samaritas. Scott holds a master’s degree in international migration and public policy from the London School of Economics and Political Science.
Kate Powers joined the League as the Chief Development Officer in February 2025. Prior to joining the League, Kate held leadership positions at many Michigan nonprofit organizations, most recently serving as the COO and Chief Development Officer of Ele’s Place. Kate has spent the bulk of her career in fundraising, with a short stint in the state Legislature as a legislative aide to members in both chambers. Kate is a graduate of Michigan State University’s James Madison College with a Bachelor of Arts in Social Relations and has a certificate in fundraising management from the Lilly Family School of Philanthropy at Indiana University. Additionally, Kate served on the East Lansing Public Schools Board of Education and is a past President of the Junior League of Lansing. In her free time, she enjoys traveling with her husband and her son and saving outfit of the day and home decor ideas on Pinterest. 
Nicholas Hess joined the League as the Fiscal Policy Analyst in September of 2024. In this role, Nicholas focuses on tax policy, government revenue, and their impact on working families and racial equity, including the effects of the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). Nicholas values the role that judicious fiscal policy can play in the improvement of people’s lives and the economy, alleviating inequities along the way.
Audrey Matusz joined the League as the Visual Communications Specialist in September 2024. She supports the team with implementing social media strategies and brainstorming creative ways to talk about public policy. She brings with her nearly a decade of experience in producing digital products for evidence-based social justice initiatives. 
Jacob Kaplan 
Donald Stuckey 
Alexandra Stamm 
Amari Fuller
Mikell Frey is a communications professional with a passion for using the art of storytelling to positively impact lives. She strongly believes that positive social change can be inspired by the sharing of data-driven information coupled with the unique perspectives of people from all walks of life across Michigan, especially those who have faced extraordinary barriers. 
Yona Isaacs (she/hers) is an Early Childhood Data Analyst for the Kids Count project. After earning her Bachelor of Science in Biopsychology, Cognition, and Neuroscience at the University of Michigan, she began her career as a research coordinator in pediatric psychiatry using data to understand the impacts of brain activity and genetics on children’s behavior and mental health symptoms. This work prompted an interest in exploring social determinants of health and the role of policy in promoting equitable opportunities for all children, families, and communities. She returned to the University of Michigan to complete her Masters in Social Work focused on Social Policy and Evaluation, during which she interned with the ACLU of Michigan’s policy and legislative team and assisted local nonprofit organizations in creating data and evaluation metrics. She currently serves as a coordinator for the Michigan Center for Youth Justice on a project aiming to increase placement options and enhance cultural competency within the juvenile justice system for LGBTQIA+ youth. Yona is eager to put her data skills to work at the League in support of data-driven policies that advocate for equitable access to healthcare, education, economic security, and opportunity for 0-5 year old children. In her free time, she enjoys tackling DIY house projects and trying new outdoor activities with her dog.
Rachel Richards rejoined the League in December 2020 as the Fiscal Policy Director working on state budget and tax policies. Prior to returning to the League, she served as the Director of Legislative Affairs for the Michigan Department of Treasury, the tax policy analyst and Legislative Director for the Michigan League for Public Policy, and a policy analyst and the Appropriations Coordinator for the Democratic Caucus of the Michigan House of Representatives. She brings with her over a decade of experience in policies focused on economic opportunity, including workforce issues, tax, and state budget.
Simon Marshall-Shah joined the Michigan League for Public Policy as a State Policy Fellow in August 2019. His work focuses on state policy as it relates to the budget, immigration, health care and other League policy priorities. Before joining the League, he worked in Washington, D.C. at the Association for Community Affiliated Plans (ACAP), providing federal policy and advocacy support to nonprofit, Medicaid health plans (Safety Net Health Plans) related to the ACA Marketplaces as well as Quality & Operations.
Renell Weathers, Michigan League for Public Policy (MLPP) Community Engagement Consultant. As community engagement consultant, Renell works with organizations throughout the state in connecting the impact of budget and tax policies to their communities. She is motivated by the belief that all children and adults deserve the opportunity to achieve their dreams regardless of race, ethnicity, religion or economic class.
Emily Jorgensen joined the Michigan League for Public Policy in July 2019. She deeply cares about the well-being of individuals and families and has a great love for Michigan. She is grateful that her position at the League enables her to combine these passions and work to help promote policies that will lead to better opportunities and security for all Michiganders.
Megan Farnsworth joined the League’s staff in December 2022 as Executive Assistant. Megan is driven by work that is personally fulfilling, and feels honored to help support the work of an organization that pushes for more robust programming and opportunities for the residents of our state. She’s excited and motivated to gain overarching knowledge of the policies and agendas that the League supports.
