Senate Appropriations Subcommittee Hears EGLE’s $1.19B Budget Pitch; Focus on Lead-Line Replacements, Cleanup and Digitization

The Senate Appropriations Subcommittee on Environment, Great Lakes, and Energy heard an executive budget overview from Director Phil Ruse of the Department of Environment, Great Lakes and Energy (EGLE), who described the governor’s fiscal 2026 recommendation as roughly $1.19 billion in gross spending, including $296 million from the general fund and a request for 1,786 full-time equivalents (FTEs).

Ruse said the request centers on four priorities: rebuilding drinking-water infrastructure (including lead service line work), preventing and cleaning up contaminated sites, supporting energy infrastructure and modernizing agency records and permitting systems. “The place to start is the people,” Ruse told the subcommittee, describing EGLE’s roughly 1,550 staff as a mix of engineers, scientists, geologists, toxicologists, meteorologists, lab technicians, law enforcement officers and support personnel.

The budget proposal would include $50 million one-time general fund and $30 million ongoing for drinking-water infrastructure to leverage roughly $70 million in federal money restricted to lead service line replacement; the state dollars are intended to cover ancillary work communities must do when replacing lines. Ruse also described about $5 million proposed for stormwater management and “just under $6 million” for staffing and support within the drinking-water division, including 32 FTEs for drinking-water permitting and three FTEs for information management.

On contaminated sites and brownfield redevelopment, Ruse said Michigan has about 26,000 known contaminated sites, roughly half classified as orphan sites for which the state is often the responsible party. The department has assessed about 10,000 sites to date. The governor’s recommendation would tap $15 million in Clean Michigan Initiative bond interest for site work, seek $7.6 million in federal Great Lakes Restoration Initiative funding for the Detroit River area of concern, and includes a proposed adjustment to the state’s solid-waste surcharge to reduce inbound out-of-state waste. Ruse said Michigan’s current solid-waste surcharge is roughly one-fifteenth of the Upper Midwest average and that 20–25% of the state’s landfill waste has come from out of state in recent years.

Ruse told the subcommittee EGLE is calling for 17 FTEs for hazardous-waste work to increase inspections and outreach to generators and to prevent new contamination. He also proposed a $7 million one-time appropriation to create a statewide septic database as a foundation for future septic code and permitting work, and noted the department is continuing brownfield redevelopment investments that it estimates have driven about 19,000 jobs in the last five years and produced roughly $45 in private investment for every $1 of state investment.

On energy infrastructure, Ruse said EGLE expects to receive $29 million in federal funds through a Renewables Ready Communities program established under the Inflation Reduction Act for community infrastructure tied to siting renewables, and requested about $10 million one-time general fund for clean-fuel and electric-vehicle charging infrastructure that would expand charging access beyond interstates to places where people live and work. The budget also includes $325,000 for the Lake Michigan Circuit, a multistate EV initiative involving Michigan, Wisconsin, Illinois and Indiana.

The governor’s recommendation includes a $39 million one-time general fund request to accelerate a records digitization project Ruse said would cut the current 15-year schedule to five years or less. Ruse said EGLE has already digitized about 5 million pages and that completing the project would cut service costs and FOIA processing burdens, with projected agency savings of $4 million annually once finished.

During questions, members pressed Ruse on fee structures and permitting capacity. Ruse said nearly 94% of EGLE’s ongoing funding is restricted revenue or federal funding, and that federal funds account for about 40% of the department’s revenue. He noted FY24 spending was roughly 63% grants and loans, 21% payroll and 13% contracts. On permit turnaround, Ruse said the department is working to produce consistent, program-level metrics and expected to provide them to the legislature when ready.

Senators asked about specific items raised in public and constituent inquiries. On a permit question related to an expansion at the Bavarian Inn in Frankenmuth, Ruse said the permit had not been denied but that outstanding issues remained to be resolved. On groundwater work, Ruse said the agency had moved groundwater functions into a geology-focused division to give them greater attention and noted ongoing work to build a statewide groundwater database funded through prior appropriations.

No formal subcommittee votes were taken on the budget during the session. The subcommittee did approve routine housekeeping: a motion by Senator Curt Schenck, seconded by Senator Cherry, to excuse Senator Singh’s absence carried without objection; Chair Erwin moved to adjourn, supported by Senator Cherry, and the subcommittee adjourned without objection.

Ruse concluded, “That’s the overview. I’d be happy to take any questions,” and the hearing moved into a question-and-answer period focused on staffing, fee structures and implementation timelines.