Houghton and Hancock city councils have approved their final budget amendments for the 2025-26 fiscal year, closing out what both city managers describe as one of the most challenging budget seasons in recent memory.
Houghton City Manager Eric Waara said the city navigated shortfalls in its major street fund by finding internal solutions while waiting on delayed state payments.
“We’re still waiting on income that is supposed to be coming in from the state,” Waara said. “A lot of this stuff gets left up to our auditors to help us book when we get everything prepped about September. In Major Street, we balance the overages in snow removal with the return funds from equipment — we were able to massage everything within those funds to get things to work out where they were supposed to.”
Waara said the city also leaned on reserve funds and inter-fund transfers to cover storm damage repairs from last year and bond payments related to the 2023 parking deck removal.
“We propose to use planned fund balances, which have allowed us to offset the storm damage repair from last year, which ended up fixed in this fiscal year,” he said. “We make the bond payment for taking the deck down from cash that we are holding in reserve.”
Hancock City Manager Mary Babcock said the 2025-26 budget was the most difficult she has worked on, citing uncertainty around state funding contributions.
The budget pressure facing both cities stems in part from Michigan’s 2025 state budget negotiations. Lawmakers eliminated the sales tax on gas and added a marijuana wholesale tax projected to generate $420 million, with most of the revenue directed to the Neighborhood Road Fund. However, recent reporting from The Detroit News estimates Michigan collected only about one-third of the $105 million it expected during the first quarter of 2026.
