LANSING — Michigan lawmakers did not approve a new budget by their July 1 deadline. On Wednesday, July 2, 2025, the legislature passed a resolution extending an energy emergency for 77 days, delaying a transition to a higher-cost summer fuel blend through September 15.

This marks the second consecutive year that the Republican-led House and Democratic-led Senate have not met the July 1 budget deadline. State law mandates the Michigan Legislature sign off on a state budget annually on or before July 1. There is no penalty for missing this deadline, and the state's fiscal year begins on October 1.

Michigan State Senator Darrin Camilleri acknowledged on Wednesday that a full budget agreement had not been reached. He said progress was being made on measures involving more than $80 billion in spending. "When you're doing a lot of big policy bills or big items in the budget, it just takes a lot of time to get through each of those individual items," Camilleri said.

Negotiations have included House Speaker Matt Hall's push for property tax cuts, though it appeared that these provisions would not be part of the final budget deal. Governor Gretchen Whitmer has supported a plan to increase the tax incentive cap on the state's transformational brownfield program. This program allows businesses behind projects to retain tax withholdings from their developments. Previously, Whitmer's budget director, Jen Flood, stated the state faced a $1.8 billion financial gap.

Michigan State Senator Jonathan Lindsey said many in Lansing expected final budget votes early Friday morning, ahead of the Fourth of July weekend. "We get sent up here to do a job," Lindsey said. "It's not that hard. Sit down and go through the numbers and negotiate. The real failure here is in the process. People don't start this seriously enough."

The energy emergency extension permits gas stations in southeast Michigan to further postpone their shift to a more expensive summer fuel blend. Governor Whitmer initiated this emergency with an executive order in early April, suspending a law requiring the fuel blend change. Her 90-day order was scheduled to expire on July 1 without legislative approval. State law requires gas blends across Michigan to begin reducing vapor pressure in April to comply with lower-vapor-pressure blends used during the summer.

Specifically, state law mandates Wayne, Oakland, Macomb, Washtenaw, Livingston, Monroe, St. Clair, and Lenawee counties switch to a 7 pounds per square inch lower vapor pressure gasoline from June 1 through September 15. This lower vapor pressure blend is typically more expensive than other blends in the state. The blend aims to reduce pollution and address historical air quality issues in southeast Michigan. The average price of regular gasoline in Michigan is currently $4.09 per gallon, compared to $3.23 per gallon a year ago, according to AAA Michigan.

Governor Whitmer issued a statement on Wednesday regarding the lawmakers' vote. "I’m grateful for partners in both chambers of the Legislature who worked across the aisle to get this done. Let’s keep working together to make a difference on the issues that matter and put money back in Michiganders’ pockets," Whitmer said.