Mary Anne Cleary, director of the House Fiscal Agency, gave the House Appropriations Committee an overview of the governor’s fiscal year 2026 executive budget recommendation and its principal drivers, and committee members asked questions about lead service lines, psychiatric hospital staffing and Medicaid costs.

Cleary said the executive recommendation totals about $83.5 billion in adjusted gross appropriations across all funds and that health and human services and K‑12 school aid account for the largest shares. “It’s my honor to be here this morning to be your first official presenter in front of this committee,” Cleary said, noting the presentation and supporting materials are available on the House Fiscal Agency website.

The presentation outlined starting balances carried into fiscal 2026, revenue changes following the January consensus revenue conference, and a mix of ongoing and one‑time spending. Cleary said the governor’s proposal begins fiscal 2026 with roughly $700 million in additional carryforward for the general fund and over $1 billion carried forward in the school‑aid fund, and she highlighted a roughly $394.6 million (about 2.7 percent) increase in general fund appropriations under the executive recommendation.

Cleary and staff emphasized Medicaid and other health‑care costs as major drivers. The governor’s supplemental request includes roughly $284 million in general fund to cover caseload and cost changes in Medicaid and a federal repayment tied to a Medicaid disallowance; Cleary said an $81.6 million repayment is required in fiscal 2025 as part of a multi‑year payback.

The governor’s proposal also highlights both ongoing investments and one‑time allocations. Ongoing increases include a roughly $172.5 million package in DHHS for program costs and new items (including a proposed Medicaid spend‑down threshold and kinship support services) and an enrollment‑related average compensation adjustment for state employees estimated within the current services baseline. One‑time items include an anticipated $50 million deposit to the Budget Stabilization Fund, funding for lead service‑line replacement (a $50 million one‑time component in the Department of Environment, Great Lakes, and Energy request plus a separate $30 million ongoing component for a total cited of $80 million), federal‑aid matching for the Department of Transportation, and information technology investment funds.

Cleary said the executive recommendation repackages some funding sources (for example shifting about $100 million between general fund and school aid fund for higher education without a net increase) and proposes a tuition‑restraint boilerplate that would cap annual tuition growth at 4.5 percent for institutions. She also noted restricted‑revenue proposals that would require statutory change, including a change to tipping‑fee rates and a proposed vaping products tax estimated to raise roughly $57 million to fund public‑health programs and reduce general‑fund pressure in DHHS.

Committee members pressed for details during a question period. Representative Price asked how many lead service lines would be replaced with the $50 million allocation; Cleary responded, “I think the answer is we do not have that,” and said the number depends on local findings and that staff would provide additional details when available.

Representative Rogers asked whether the 47 FTEs and $15 million cited for moving patients into the new Northville psychiatric facility represented net new positions or simply a transfer from Walter Reuther; Cleary replied, “It should be the net need compared to what they have for Ruth there. So there should not be any resources pulled from the other psychiatric hospitals.” Representative Steele asked whether caseloads had increased or decreased following post‑pandemic redeterminations; Cleary said caseloads have declined since redetermination but that inflationary pressures — principally higher costs in managed care and nursing homes — are driving significant cost increases in Medicaid. Cleary also noted the state lists about 2.6 million people currently enrolled in Medicaid.

House Fiscal staff answered more technical school‑aid questions. Jacqueline Mullen, a school‑aid analyst with the House Fiscal Agency, offered to follow up with data on the Grow Your Own teacher pipeline and confirmed that a longstanding budget line reimburses AP, IB and CLEP exam fees for low‑income students.

Votes at the meeting were procedural: Representative Maddock moved to approve the minutes of the committee’s February 5 meeting; the clerk reported the motion passed with 27 yeas, 0 nays, 0 passes. Representative Borton moved to adopt a proposed committee rule permitting the chair discretion to allow public comment and to accept written testimony in lieu of oral testimony; that motion also passed on a 27‑0 voice roll call. The committee adjourned by unanimous consent.

The committee is preparing follow‑up requests to departments for detail on lead‑line ownership and replacement estimates, the fiscal impact of proposed fee and restricted‑revenue changes, and agency‑level staffing and caseload detail. Members indicated that departmental witnesses will be asked to appear for more detailed line‑item and program‑level hearings as the budget process continues.