Michigan Governor budget to seek major tax hikes on tobacco, vaping and gaming to address Medicaid gap

Feb.12
Michigan Governor budget to seek major tax hikes on tobacco, vaping and gaming to address Medicaid gap
Governor Gretchen Whitmer’s proposed fiscal year 2027 budget includes significant tax hikes on tobacco and gaming to address a projected $1.8 billion shortfall in Michigan’s Medicaid funding, the report said. The plan calls for raising the per-pack cigarette tax from $2 to $3 and increasing the wholesale tax on other tobacco products from 32% to 57%.

 

Key Takeaways

 

 

  • FY2027 budget proposal aims to address a projected $1.8 billion Medicaid funding shortfall in Michigan
  • Cigarette tax proposed to rise from $2 to $3 per pack; other tobacco wholesale tax from 32% to 57%
  • New 57% wholesale tax proposed on vaping products and nicotine pouches, projected at $95 million annually
  • Gaming industry also targeted for higher taxes as federal pandemic-era subsidies expire, to support the General Fund
  • Budget director Jen Flood said the package protects coverage for about 2.5 million Medicaid residents; Republican opposition expected

 

 


 

 

 

2Firsts, February 12, 2026 – 

 

According to WTVB, Governor Gretchen Whitmer’s proposed fiscal year 2027 budget includes significant tax hikes on tobacco and gaming to address a projected $1.8 billion shortfall in Michigan’s Medicaid funding.

 

The report said the plan, to be presented to the Legislature that day, calls for raising the per-pack cigarette tax from $2 to $3 and increasing the wholesale tax on other tobacco products from 32% to 57%. It also seeks a new 57% wholesale tax on vaping products and nicotine pouches, which are currently untaxed, projected to generate an estimated $95 million annually for public health and youth mental health services.

 

The report added that the budget proposal also targets the gaming industry, seeking higher taxes to help stabilize the state’s General Fund as federal pandemic-era subsidies expire.

 

State Budget Director Jen Flood said the measures are part of a “responsible mix” of revenue enhancements and efficiencies intended to protect healthcare coverage for approximately 2.5 million residents on Medicaid, according to the report.

 

The report said the Whitmer administration argues these “sin taxes” are necessary to avoid drastic cuts to core services, but they are expected to face stiff opposition from Republican lawmakers who have raised concerns about creating new financial burdens for Michigan families.

 

Source of the image: WTVB

 

We welcome news tips, article submissions, interview requests, or comments on this piece.

Please contact us at info@2firsts.com, or reach out to Alan Zhao, CEO of 2Firsts, on LinkedIn


Notice

1.  This article is intended solely for professional research purposes related to industry, technology, and policy. Any references to brands or products are made purely for objective description and do not constitute any form of endorsement, recommendation, or promotion by 2Firsts.

2.  The use of nicotine-containing products — including, but not limited to, cigarettes, e-cigarettes, nicotine pouchand heated tobacco products — carries significant health risks. Users are responsible for complying with all applicable laws and regulations in their respective jurisdictions.

3.  This article is not intended to serve as the basis for any investment decisions or financial advice. 2Firsts assumes no direct or indirect liability for any inaccuracies or errors in the content.

4.  Access to this article is strictly prohibited for individuals below the legal age in their jurisdiction.

 

Copyright

 

This article is either an original work created by 2Firsts or a reproduction from third-party sources with proper attribution. All copyrights and usage rights belong to 2Firsts or the original content provider. Unauthorized reproduction, distribution, or any other form of unauthorized use by any individual or organization is strictly prohibited. Violators will be held legally accountable.

For copyright-related inquiries, please contact: info@2firsts.com

 

AI Assistance Disclaimer

 

This article may have been enhanced using AI tools to improve translation and editorial efficiency. However, due to technical limitations, inaccuracies may occur. Readers are encouraged to refer to the cited sources for the most accurate information.

We welcome any corrections or feedback. Please contact us at: info@2firsts.com

Vape sellers sue to block Texas law banning e-liquids from China and other “foreign adversaries”
Vape sellers sue to block Texas law banning e-liquids from China and other “foreign adversaries”
A group of vape distributors and retailers has sued to block enforcement of a Texas law that criminalizes selling or marketing vape products containing e-liquids made wholly or partly in China or in countries designated as “foreign adversaries” by the U.S. Commerce Secretary. The plaintiffs argue the law violates the U.S. Constitution because only Congress may regulate foreign commerce.
Feb.03 by 2FIRSTS.ai
Alaska AG warns 1,500+ retailers to stop selling unauthorized vapes and nicotine pouches
Alaska AG warns 1,500+ retailers to stop selling unauthorized vapes and nicotine pouches
Alaska’s attorney general has sent warning letters to more than 1,500 retailers and distributors, cautioning them against selling tobacco products — including e-cigarettes and oral nicotine pouches — that lack U.S. Food and Drug Administration authorization.
Mar.06 by 2FIRSTS.ai
STG UK refreshes XQS nicotine pouch packaging: new flavour indicators, hitting retail from March
STG UK refreshes XQS nicotine pouch packaging: new flavour indicators, hitting retail from March
Scandinavian Tobacco Group UK (STG UK) has announced a rebrand across its XQS nicotine pouch range. The updated packaging will be visible at retail from March, with the recommended retail price remaining £5.50. The new packs feature a bolder logo and glossy textures, retain nicotine strength indicators, and add a side flavour profile indicator to show the flavour type.
Feb.28 by 2FIRSTS.ai
Bulgarian Police Seize More Than 56,500 Heated Tobacco Sticks in Sofia Operation
Bulgarian Police Seize More Than 56,500 Heated Tobacco Sticks in Sofia Operation
Bulgaria’s Interior Ministry said two men aged 48 and 50 were detained during a specialised police operation in Sofia’s Krasna Polyana district for distributing e-cigarettes and tobacco without excise stamps.
Mar.17 by 2FIRSTS.ai
2Firsts Interview with Glas |Why a California ENDS Company Believes Its Age-gated Flavored Vape Could Be Next in Line for FDA Authorization
2Firsts Interview with Glas |Why a California ENDS Company Believes Its Age-gated Flavored Vape Could Be Next in Line for FDA Authorization
As the FDA advances efforts to streamline its PMTA review process, including support for small businesses, expectations are rising that additional product authorizations may follow. Age-verification technology is emerging as a key consideration in future approvals.In this interview, California-based Glas discusses its G2 platform, integrating smartphone-based identity verification, proximity controls and anti-counterfeit systems, and outlines its positioning under the FDA’s PMTA framework.
Mar.02
Focus on Regulation and Taxation: EVO NXT 2026 Provides Strategic Guidance for Decision-Makers
Focus on Regulation and Taxation: EVO NXT 2026 Provides Strategic Guidance for Decision-Makers
The NGP industry faces rising innovation pressure, growing consumer demand and intensifying regulatory dynamics. Sustainable growth now depends on reliable market intelligence, strong partnerships and structured dialogue with policymakers and stakeholders. On 17–18 April 2026 in Prague, EVO NXT will convene manufacturers, retailers, distributors and industry experts for strategic exchange, with this year’s conference placing regulation and taxation firmly at the center of discussion.
Mar.02