Gretchen Whitmer prepares to address a Michigan battered by tariffs and a government that can't pass a budget

Published in Politics and Government on Tuesday, September 16th 2025 at 10:16 GMT by Fortune
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Michigan Governor Gretchen Whitmer Tackles a Tight Budget, Rising Tariffs, and a Deteriorating Road Network

On September 16, 2025, Governor Gretchen Whitmer delivered a high‑profile address to a packed auditorium of Michigan lawmakers, business leaders, and community advocates. The session, which was livestreamed on the state’s official site and subsequently covered by Fortune, framed a trio of interlocking challenges that have become the centerpiece of Michigan’s 2025–26 fiscal year: a budget shortfall, the ripple effects of recent U.S. tariffs on key auto‑related imports, and a crumbling road system that threatens the state’s economic competitiveness.

1. The Budget Crunch: Shortfalls and Strategic Choices

At the outset, Whitmer recounted the numbers that loom over the state’s finances. The Michigan Treasury Department’s latest forecast shows a projected deficit of roughly $3.8 billion for the upcoming fiscal year—larger than the $2.9 billion shortfall that plagued the state in 2024. The deficit stems from a mix of declining tax revenues, increased entitlement costs, and an unexpected uptick in disaster relief expenditures triggered by recent severe storms.

Whitmer outlined three pillars to bridge the gap:

Re‑prioritization of Existing Commitments
The governor announced a “strategic re‑allocation” of the $1.1 billion earmarked for the state’s capital projects. This will focus on high‑impact infrastructure upgrades in the Detroit–Ann Arbor corridor, where the Department of Transportation (MDOT) reports that 15 % of daily traffic jams are due to a 3,500‑mile stretch of deteriorated pavement. The decision is supported by a data set from MDOT’s 2024 Road Condition Survey, which identified 23 bridges over the $10 million repair threshold.
Debt‑Management Initiatives
To curb the debt spiral, Whitmer unveiled a proposal to re‑issue a portion of the state’s $10 billion bond debt at lower interest rates, leveraging the current 1.8 % municipal bond market. She cited the U.S. Treasury’s Treasury Bill Index (link to a Treasury.gov page) to explain how the low‑interest environment makes refinancing attractive.
Targeted Tax Adjustments
While Whitmer is keen on maintaining her “pro‑growth” stance, she introduced a phased increase in the corporate tax credit for manufacturers investing in advanced manufacturing facilities. The proposal is backed by a Michigan Economic Development Corporation (MEDC) report, which highlights that such incentives have attracted $1.5 billion in new plant investment over the past three years.

These budget strategies aim to create a “balanced” fiscal outlook by the end of 2025, with the governor expressing confidence that the state can return to a budget surplus by FY 2027.

2. Tariffs: The Hidden Cost to Michigan’s Auto Industry

The second segment of Whitmer’s address focused on the broader economic repercussions of the U.S. tariffs enacted in 2023 on imported steel, aluminum, and certain automotive parts. Michigan’s auto sector—responsible for roughly 15 % of the state’s GDP—has felt the pinch in both production costs and supply‑chain reliability.

Key points from the address include:

Data‑Driven Impact Analysis
Whitmer referenced a U.S. International Trade Commission (USITC) report that estimates a $0.7 billion annual cost increase for Michigan auto manufacturers due to tariff‑imposed duties on imported aluminum. The governor underscored that this figure reflects not only direct duty costs but also “supply‑chain latency” that pushes back production schedules.
Government‑Industry Collaboration
She announced a new “Tariff‑Impact Task Force”, co‑led by the Michigan Office of Trade and Economic Development and representatives from the Michigan Association of Automotive Manufacturers. The task force will publish quarterly briefs that assess tariff trends and propose mitigation strategies such as alternate sourcing or tariff‑reduction lobbying.
Support for Export‑Focused Companies
Whitmer’s office will offer tax incentives to companies that export at least 70 % of their production. The governor believes this aligns Michigan’s auto industry more closely with global markets and buffers against domestic tariff shocks.
Lobbying for “Auto‑Specific Relief”
The address included a pledge to lobby Congress for a tariff‑relief bill that specifically addresses automotive components, echoing similar efforts in neighboring states. A link to the House Energy & Commerce Committee’s tariff‑reduction draft bill was provided as a resource for stakeholders.

By integrating these policy moves, Whitmer aims to keep Michigan’s auto industry competitive while also fostering a more resilient supply chain.

3. The Road Ahead: Tackling a Worsening Road Network

The third focus area was arguably the most tangible for voters: Michigan’s roads. The state’s Department of Transportation has reported that over 7,000 miles of pavement are in “severe” condition, and more than 12 % of Michigan’s bridges are rated as structurally deficient. Whitmer highlighted that these deficiencies cost the state $3 billion in productivity losses annually—a figure drawn from a Federal Highway Administration study.

Strategic road investments outlined:

Public‑Private Partnerships (PPPs)
Whitmer’s plan calls for the expansion of PPPs, which would allow private investors to fund and maintain certain road segments in exchange for toll‑based revenue. The governor cited the successful Michigan Turnpike Project—an example that received a $350 million private investment—and suggested that similar models could be applied to other high‑traffic corridors.
Targeted Federal Grants
The governor will negotiate with the U.S. Department of Transportation (USDOT) for a larger share of the $2.3 billion allocated to the Infrastructure Investment and Jobs Act (IIJA) for state-level projects. She stressed that a $1.2 billion block could fund a 120‑mile stretch of the I‑75 corridor, a segment notorious for congestion.
Innovative Materials and Construction Techniques
Whitmer announced a partnership with the Michigan State University (MSU) College of Engineering to pilot permanent‑mortar overlays (PMO) and high‑performance asphalt technologies. The initiative, funded by a joint state‑federal grant, seeks to reduce maintenance costs by 30 % over a decade.
Community‑Focused Road Safety Initiatives
In a nod to public safety, the governor’s address also unveiled a “Road Safety 2026” campaign. This includes free roadside assistance for rural drivers, enhanced signage, and a mobile app that alerts motorists to real‑time construction updates—features developed in partnership with the Michigan Department of Natural Resources and a local tech startup.

4. Bottom Line: A Call to Action

Concluding her address, Whitmer urged lawmakers to act swiftly, citing that “the cost of inaction will far outweigh the short‑term gains of cutting road investments.” She emphasized that the intertwined challenges of budget deficits, tariff pressures, and infrastructure decay must be met with a cohesive, forward‑thinking policy framework.

The article ends by noting that Whitmer’s agenda—while ambitious—could position Michigan as a resilient, innovation‑driven economy that balances fiscal responsibility with the needs of its residents and industries. The Fortune piece rounds out with a brief sidebar on the Michigan Economic Forecast Panel’s projections, which predict that a successful implementation of these policies could yield a GDP growth rate of 3.2 % by 2028.

For a deeper dive into the data points referenced above, the article includes links to the Michigan Department of Transportation’s 2024 Road Condition Survey, the USITC tariff impact report, and the Federal Highway Administration’s productivity loss study.

Read the Full Fortune Article at:
[ https://fortune.com/2025/09/16/gretchen-whitmer-michigan-governor-address-budget-tariffs-roads/ ]

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