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What do potholes, lead service lines, and that abandoned factory on the edge of town have in common? They’re all problems we’ve been talking about for years, and Michigan’s 2026 budget just put money on the table to address them. The catch? Figuring out how to access that money is still a work in progress.

Michigan’s $81 billion budget includes serious investments: $451 million for water infrastructure, nearly $2 billion for roads and bridges, and $154 million for cleaning up contaminated sites. These aren’t just numbers on a spreadsheet; they represent real possibilities for real communities. But (and yes, there’s a but) the budget announcement is just the beginning. We’re still waiting for important details: when applications open, what projects qualify, what local match might be required.

So why bring this up now when there are still so many question marks? Because waiting for perfect information means missing opportunities. Communities that start planning now—that begin conversations with neighbors about priorities, that get preliminary designs together, that identify which pots of money align with their needs—those are the communities that will be ready when application windows open.

This is a neighbor-to-neighbor moment. Whether you’re a city engineer, city council or township board, or just someone who just cares about your community’s future, understanding this budget helps you be part of the solution. Let’s break down what’s available, what we’re still waiting to learn, and how your community might benefit.

This is what we know so far…

Michigan’s 2026 Budget: Planning Ahead for Project Funding

Michigan’s Fiscal Year 2026 budget has been signed into law, and it offers valuable insight into where state funding will be directed in the coming year. For communities and organizations planning infrastructure, environmental, and other projects, these numbers can help guide funding strategies and scheduling. The recently announced $81 billion budget includes a $14.1 billion General Fund, maintaining balance while investing in long-term state priorities such as clean water, safe infrastructure, and local economic development.

Investing in Michigan’s Environment

The Michigan Department of Environment, Great Lakes, and Energy (EGLE) will manage several major funding areas aimed at protecting air, land, and water resources statewide. Some of these highlights include:

  • $451 million for water infrastructure to support local system improvements, lead service-line replacements, stormwater management, and protection of lakes and streams.
  • $154 million for remediation, redevelopment, and underground storage-tank cleanup to restore contaminated sites and prepare them for reuse.
  • $129 million to assist communities that host renewable energy and energy-storage projects, with added emphasis on public safety and local readiness.
  • $83.3 million for water-quality programs focused on Michigan’s rivers, lakes, and groundwater.
  • $78 million through the Renew Michigan program for brownfield redevelopment, waste management, recycling, and sustainability.

Additional EGLE investments include $40 million for drinking-water and environmental-health programs, $39 million for air-quality monitoring, and $32 million for materials-management initiatives that reduce waste and promote circular-economy practices. Combined, these allocations show strong ongoing commitment to environmental health and resilient communities.

Strengthening Infrastructure and Roads

Infrastructure investment continues to be one of Michigan’s largest priorities. The FY 26 budget establishes nearly $2 billion in ongoing annual funding to improve state and local roads, bridges, and transportation systems once fully implemented. This new structure aims to create a more reliable revenue stream that helps local agencies plan ahead. Some highlights include:

  • $1.8–$2 billion in ongoing resources for roads and bridges across the state, distributed among MDOT, counties, and local road agencies.
  • $550 million for state trunkline preservation and major reconstruction projects.
  • $480 million directed to county and municipal road programs for resurfacing, drainage, and safety improvements.
  • $200 million to support local bridge bundling and rehabilitation of aging structures statewide.
  • $150 million for public transit systems, enhancing access and reliability for Michigan commuters.
  • $75 million for rail-grade separation projects to improve safety where roads and railways intersect.
  • $25 million for airport infrastructure upgrades improving regional connectivity and logistics.

These numbers signal a continued commitment to rebuilding the state’s transportation backbone and supporting safer, more efficient travel for both residents and businesses. For local governments, this creates opportunities to align road and transportation projects with available state funding cycles.

How the Road Funding Increase Works

The numbers are impressive, but how is Michigan actually paying for this significant infrastructure investment? Recent insights from the County Road Association at the Grand Rapids Chamber’s Infrastructure Committee meeting help clarify the mechanics behind the funding increase.

All Act 51 agencies that own roads can expect roughly a 33% increase in funding. This represents a substantial boost in resources for counties, cities, and villages across the state. The increase begins January 1, 2026—the start of the second quarter of the state fiscal year—which means FY26 will reflect approximately 75% of what a typical full year under the new structure will provide.

The additional revenue comes from several sources. Most notably, Michigan has restructured how fuel is taxed at the pump. Previously, drivers paid both a fuel tax (which funded roads) and a sales tax (which primarily funded education). Under the new system, the sales tax component converts to an equivalent fuel tax, with all revenue directed toward roads. For drivers, this means no change in what you pay at the pump—just a shift in where that money goes. To offset the loss of sales tax revenue for schools, the state has adjusted how it taxes businesses.

The 2019 gas tax increase included indexing for inflation, and that provision continues under the new budget. Additionally, a new 24% wholesale tax on marijuana will contribute to road funding, though this provision has already faced legal challenges.

Looking ahead, Michigan faces the same challenge as states nationwide: how to equitably fund roads as more drivers switch to electric and hybrid vehicles. The FY26 budget addresses this by increasing vehicle registration fees for electric and hybrid vehicles and funding a study on a Roadway User Charge system. There’s growing discussion about shifting from a fuel-consumption model to a miles-driven model for road funding—a conversation that’s happening across multiple states and will likely take years to fully develop.

Opportunities for Communities and Clients

With so many funding programs already identified, 2026 is shaping up to be a strong year for project advancement. For those developing plans or seeking funding partnerships, a few steps can help position projects effectively:

  1. Align with state priorities. Projects addressing water quality, infrastructure reliability, remediation, and renewable energy are well matched to Michigan’s funding direction.
  2. Advance designs early. Having design, permitting, and cost estimates ready improves eligibility for grants or loans when application windows open.
  3. Coordinate with local and state agencies. Collaboration helps ensure project scopes fit within existing funding frameworks.
  4. Monitor upcoming solicitations. Many EGLE and transportation programs will announce specific opportunities over the coming months.

The FY 26 budget demonstrates Michigan’s commitment to building strong, sustainable communities. With substantial investment in clean water, redevelopment, and infrastructure, there are many opportunities ahead for well-planned projects to move forward. Prein & Newhof remains ready to help clients identify funding options, develop plans that meet program criteria, and bring meaningful improvements to Michigan communities in the year ahead.

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While it is typical to have someone who objects to a proposed trail, in most cases we see an about-face once the trail opens for public use. One property owner actually called me a couple months after the trail opened and apologized for being difficult during construction. She discovered how much she loved the trail! She said that all of the neighbors now meet on the trail where their children are able to safely ride their bikes.

The best way to handle trail opposition is to have a conversation and find the why. Getting to the heart of the matter allows for clarification and, if needed, compromise.

It can be hard for some people to visualize how a trail will benefit them until they have one nearby, but most people eventually come around. And, in the process you meet some interesting people. Here are a few of my favorites:

  • A couple who owned a bed and breakfast along a proposed trail’s route voiced their vehement complaints about anything involving the trail during the design process. They would not allow the contractor to set foot on their property, not even to build a retaining wall at the edge of the right-of-way. After the trail opened, I checked their website, and not only was the trail listed as one of their key attractions, they stocked bicycles for their guests to use!
  • One woman became so upset when the contractor cleared sod from her lawn that she began weeping. As the bulldozer approached, she lay down in its path and wouldn’t get up. Finally, we convinced her that we would replace her precious petunias as soon as the contractor paved the trail.
  • Another time, an anti-government/militia-type person who was opposed to a trail began making vague threats to me. To him, this project represented the government abusing its power. Ironically, he then threatened to call the police and have me put in jail!
  • I once met with an angry man whose body shook as if he was freezing as we talked. Our trail project planned to take out several scrub trees within the right-of-way, which he considered his front yard. This triggered his paranoia, because he felt the trees were the last barrier between him and those out to ‘get’ him. Looking me in the eye he said “I better go inside now. I’m afraid I’ll do something I’ll regret if I don’t.”
  • We try to design our trails to serve as many people as we can. One trail connected a new development with a park, and passed in front of several houses on a busy road. One of those homeowners objected to the trail. His rationale—he was afraid with the trail traffic by his house that someone would steal the tires off his cars.
  • An elderly man was so upset about a trail that he was afraid he would have a heart attack during its construction. His parting words to me were “If I die during this project, you’re to blame, and that’s something you’ll have to live with for the rest of your life.”
  • While a trail was under construction an elderly man emerged from his house carrying his oxygen tank in one arm and waving a shotgun in the other while chasing the contractor away from his yard. This was his not-so-subtle way of voicing his displeasure with a new trail.
  • When a utility line is accidentally cut, I always hope that it is a “non-essential” service like electricity or telephone; homeowners are more understanding of these mishaps than when it’s their cable TV line that’s cut!!

Scott Post is a board member at the West Michigan Trails and Greenways Coalition. He has designed nearly 150 miles of non-motorized trails in Michigan.

When I started designing non-motorized trails in the Holland area about 16 years ago, trail development was still in its infancy. Since then, I have designed or managed construction of about 150 miles of trails. As your community’s trail system develops, maintenance becomes a real concern. Here are 13 of my favorite maintenance-minimizing trail design tips:

Paving

  • For a paved trail, use two courses of asphalt. The second course minimizes cracking and provides a much smoother surface for minimal extra up front cost. Contractors may ask if they can pave the same thickness in one course, because it saves them a little money. Do NOT allow it!
  • Extend your gravel sub-base at least one foot beyond the paved trail edge. Any less and the edges can crack and eventually fail.
  • Test the gravel gradation and compaction during construction. The wrong mix or sloppy compaction will cause early cracks in the pavement.

Vegetation

  • If it is necessary to clear vegetation to build your trail, be careful to remove all roots – especially willow trees and yucca plants. They will grow back right through the pavement!
  • Remove all dead and dying trees within 10 feet each side of the trail. Falling branches can be dangerous and the debris clutters trails.
  • Keep your trail away from trees if possible. Roots and debris are two of a trail’s most common maintenance headaches.
    If you cannot dodge trees and you are worried about roots wrecking the trail surface, consider installing a product similar to bio-barrier. Products like this do not injure the trees, but when installed correctly, they prevent the roots from growing under the trail.
  • If your trail parallels a road, as often as possible, maintain a grass strip between the pavement edges. This protects both the trail and the road shoulder. It also minimizes road gravel washing all over your trail after it rains.

Layout and Structure

  • If fill to build your trail, make sure the downhill side-slope is no steeper than 1 ft. of rise over 3 ft. width. If it is too steep, the slope often settles and takes the pavement edge with it.
  • If your trail includes a bridge or boardwalks, include concrete approach ramps. This minimizes the inevitable settlement and “bump” at the transition point.
  • If your trail goes downhill for longer than 300 ft., find a way to drain water off the trail surface into a swale, ditch, gutter or catch basin. Otherwise, the edge of the path, shoulders or the grass along the trail could wash out.
  • If you are building a trail above native clay soil, consider placing a filter fabric between the clay and the sand/aggregate sub-grade. It will help produce a uniform stress on the clay and prevent uneven settlement and pavement cracks.
  • In wet areas, make sure drainage goes under the trail, not over it. Build the trail higher if necessary. Use a culvert to convey flow or equalize ponding on both sides of the trail. Otherwise the trail becomes frequently wet and potentially dangerously slippery.

Scott Post is a board member at the West Michigan Trails and Greenways Coalition. He has designed nearly 150 miles of non-motorized trails in Michigan.