Michigan Set for 30% More Spending on Local Road Repair in 2026

For Michigan drivers, it is a familiar and frustrating story: the jarring thump of a pothole that sends a shiver through the entire car.

But a long-awaited reprieve may finally be on the horizon.

State officials in Lansing have confirmed that Michigan has 30% more to spend on local road repair in 2026, a significant financial boost aimed directly at neighborhood and subdivision streets.

This is not a minor budget tweak.

It is a fundamental shift in funding, made possible by a landmark transportation package passed in late 2025.

During a presentation to the House Appropriations Subcommittee on State and Local Transportation on January 21, new projections were unveiled that paint a promising picture for local infrastructure.

County road commissions across Michigan’s 83 counties are projected to receive an additional $408.8 million, bringing their total funding to over $1 billion for the year.

Michigan's 533 cities and villages will see an extra $220 million distributed among them for much-needed repairs.

The cash infusion comes from two primary sources: a 20-cent increase on motor fuel taxes and a controversial new 24% wholesale marijuana tax.

The cannabis tax, which supplements an existing 10% retail tax, drew criticism from industry leaders who feared it could cripple small businesses and raise prices for consumers.

This new revenue, along with earmarked Corporate Income Tax dollars, will feed into a new Neighborhood Roads Fund.

This fund is a game-changer because, unlike the traditional Michigan Transportation Fund (MTF) which often requires a local match, these new dollars can be used to cover 100% of repairs on lower-volume neighborhood streets.

This is a critical distinction for smaller communities with limited budgets.

The need is undeniable.

Recent data shows that only 46% of Michigan's local roads are considered to be in good or fair condition, a statistic that every driver feels during the spring pothole season.

While the exact distribution to each specific community is not yet available, the overall increase marks a major priority for Michigan lawmakers who negotiated the deal.

For residents tired of navigating crumbling asphalt, 2026 represents the first real hope for smoother, safer drives close to home.

FAQ: Michigan Road Funding

Where is the extra money for Michigan road repair coming from?

The increased funding comes from a 20-cent per gallon fuel tax increase that began on January 1, 2026, as well as a new 24% wholesale tax on marijuana and dedicated funds from the Corporate Income Tax.

Will this new funding fix the potholes in my neighborhood?

The new Neighborhood Roads Fund is specifically designed to target lower-volume neighborhood and subdivision streets. Unlike past funding, it can cover 100% of repair costs without requiring a local financial match, making it much more likely that smaller residential projects will be completed.

How much more money is going to local road projects in Michigan?

Overall, Michigan has 30% more to spend on local road repair in 2026. This breaks down to an additional $408.8 million for county road commissions and an extra $220 million for the state's cities and villages.