Michigan Department of State presents FY26 budget request, responds to Auditor General findings on branch operations and Real ID procedures

Lansing — Officials from the Michigan Department of State presented the department's FY26 budget request and answered lawmakers' questions Thursday before the House Appropriations Subcommittee on General Government.

The department said the governor's recommended FY26 appropriation for the Department of State (MDOS) is $296,597,400, an increase of $4,757,500 from FY25 driven primarily by restricted‑revenue requests to fill vacant positions and baseline cost adjustments.

“The only investment in our recommended budget is $1,600,000 in restricted revenue authorization to fill 4 positions in central operations to adequately support technology efforts and 8 positions in legal services,” said Sydney Paradigm, Financial Services Director, Michigan Department of State. Paradigm told the committee MDOS currently has about 43 appropriated but unfunded full‑time equivalents and said baseline adjustments total roughly $3,600,000, with about $440,200 in a technical reduction related to restricted revenue.

Why it matters: MDOS collects large volumes of restricted revenue used statewide and says its operating costs are a small share of those collections. Paradigm told the committee MDOS collected $3,500,000,000 in FY24, and that MDOS spending was $278,000,000 — about 8 cents of every dollar collected went to department operations. She said about $2.6 billion of FY24 collections were distributed for roads and education, with other shares to the general fund and several state agencies.

Most important details

- Revenue and budget: Paradigm said MDOS collected $3.5 billion in FY24; distributions listed included roughly $2.6 billion for roads and education, $560,700,000 to the general fund, $228,000,000 to MDOS, $49,100,000 to natural resources and $29,000,000 to state police. MDOS spent $278,000,000 in FY24. The FY26 governor's recommendation totals $296,597,400.

- Staffing and positions: The budget request would authorize filling 12 restricted‑revenue positions (4 central…