Neighborhood Roads Fund Revenue Collection Update

When Governor Whitmer signed the State’s Fiscal Year (FY) 2026 budget in October 2025, it included Public Act 16 of 2025, which created the Neighborhood Roads Fund (NRF) within the Michigan Department of Treasury (Treasury). Funding for the NRF comes from two sources: a redirection of Corporate Income Tax (CIT) revenue (House Bill 4961); and revenue from a new Wholesale Marihuana Tax (WMT) (House Bill 4951).

Since then, there have been various analyses and financial forecasts related to the funding availability including an update from the Treasury’s anticipated timelines for the deposit of CIT and WMT revenue into the NRF: Michigan Treasury Neighborhood Roads Fund Revenue Collection Update.

Additionally, The Michigan Department of Transportation (MDOT) recently released the following estimate tables for both the Michigan Transportation Fund (MTF) and NRF for all cities and villages in Michigan for FY 2026 through FY 2028. Total anticipated transportation funding for each city and village can be found by combining that community’s anticipated amounts in each of the tables below.

Estimated Distribution Schedule for Michigan Transportation Funding by City/Village

Estimated Distribution Schedule for Neighborhood Roads Funding by City/Village

Reminders for local road agencies related to the NRF:

• Since the NRF is a separate fund from the MTF, it will be a separate distribution from the monthly MTF payments.
• The NRF must be used for Act 51-eligible activities on either a major/primary or local road.
• These revised estimates are a forecast. Since the marihuana tax is a new, less traditional, source for transportation revenue it may prove to be subject to fluctuation. Gas taxes and registration fees are much more predictable as they have been used as a means for taxation for road funding for decades in Michigan.
• Much of the “new” revenue from the road package is reliant on the increased marihuana revenues to be fully realized. Ongoing litigation related to the Wholesale Marihuana Tax may affect both the timing and availability of the revenue collections.