Governor Whitmer’s Proposed Budget: What It Means for Michigan’s Community Mental Health System
Governor Gretchen Whitmer’s proposed budget for fiscal years 2026 and 2027 includes allocations for behavioral health services, opioid prevention, and a new state psychiatric hospital. The budget outlines funding for Medicaid expansion and community reentry programs that include mental health services.
Behavioral Health and Community Mental Health Allocations
The proposed budget makes several investments in mental and behavioral health, including:
$46.8 million in opioid settlement funds to support prevention, treatment, harm reduction, and recovery efforts. This funding is intended to bolster the state’s ongoing efforts to combat the opioid epidemic through expanded programs and strategic investments.
$40 million for the community reentry of incarcerated individuals, which includes mental health and substance use disorder services. This investment aims to improve health outcomes and reduce recidivism by providing pre-release health screenings and post-release community support.
$15.2 million to begin operations at the new state psychiatric hospital in Northville, which will replace two outdated facilities and add 54 new beds to Michigan’s mental health system. This increase in capacity is intended to address the state’s psychiatric bed shortage.
$2.5 million for mental health services for first responders and public safety staff, which highlights the administration’s focus on mental health access beyond traditional community settings.
What It Means for CMH Providers
The budget includes funding for behavioral health services but does not contain specific provisions addressing workforce challenges, reimbursement rates, or operational sustainability for community mental health (CMH) providers. CMH agencies deliver outpatient and crisis services, which are a key part of Michigan’s public mental health system.
The Medicaid expansion proposal, which allocates $96.4 million to modify income thresholds, could increase the number of individuals eligible for Medicaid-funded behavioral health services. While this may result in increased demand for services, the budget does not specify whether Medicaid reimbursement rates for CMH providers will change to support the additional caseload.
The new state psychiatric hospital in Northville will increase inpatient capacity, which may affect referral pathways and crisis stabilization services for CMH providers working with individuals who require higher levels of care. However, the budget does not outline additional funding to support CMH providers managing the transition between inpatient and community-based care.
Certified Community Behavioral Health Clinics (CCBHCs)
The budget document does not contain a specific funding allocation for Certified Community Behavioral Health Clinics (CCBHCs). The absence of direct funding for CCBHCs raises questions about how Michigan will sustain and expand this model. CMH providers operating as CCBHCs will need to watch closely for potential funding mechanisms, such as Medicaid rate adjustments or future supplemental appropriations.
Staying Relevant
Governor Whitmer’s Fiscal Year 2026 budget proposal prioritizes economic development, cost reduction, job creation, education, and senior support. The budget includes a range of investments focused on lowering household costs, improving infrastructure, expanding access to education, and strengthening Michigan’s workforce. While mental health is not a standalone priority in the governor’s messaging, providers should frame their work as essential to achieving these broader policy goals.
Looking Ahead
The proposed budget outlines funding for behavioral health services but does not address all of the financial and workforce challenges facing CMH providers. The state legislature will review and negotiate the final budget in the coming months, and funding details may change during that process. It is an opportunity for providers to drive part of the conversation as to where the legislator should focus the states resources.
You can find the governor’s budget report online (J-27). You can find additional documents to support the budget on the State Budget Office’s website. Looking back, here is a list of key appropriation issues from the CMHAM from 2024.
