June 27 (UPI) — The Michigan legislature is nearing its July 1 deadline to approve its budget bills but the state House and Senate are at odds over anti-transgender and diversity, equity and inclusion provisions.

Earlier this month, the Republican majority in the Michigan House of Representatives passed budget bills that would penalize schools, universities and community colleges for allowing transgender girls and women to participate in girls’ and women’s sports.

Democrats, with a slim majority in the Senate, passed a different version of a budget proposal late last month. It does not include any such provisions or references to DEI initiatives and girls’ and women’s sports.

Michigan’s school aid budget bill will establish how much state funding public schools and institutions of higher learning will receive in the fiscal year beginning on Oct. 1. Since the two chambers passed different versions of the bill, they must find a compromise to send a final version to Gov. Gretchen Whitmer‘s desk.

“Ultimately, education funding bills need to be passed,” Jonathan Hanson, lecturer in public policy at the Gerald R. Ford School of Public Policy at the University of Michigan, told UPI.

“They have to work out some kind of compromise. How do you meet in the middle with respect to some of this language? It’s not immediately obvious how to compromise on those things.”

The house budget proposes withholding 20% of a school district’s discretionary funding if it is in violation of prohibitions on transgender athletes participating in female sports, having curriculum that “includes race or gender stereotyping” or funding “DEI initiatives.”

The same prohibitions apply to public universities and community colleges. Institutions in violation of these provisions could have 5% of monthly operations installments withheld by the state budget director.

The proposals cite President Donald Trump‘s executive orders “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” and “Ending Radical and Wasteful Government DEI Programs and Preferencing” as supporting federal regulations.

Less than 1% of adults in the United States identify as transgender. A smaller fraction of a percent of minors identify as transgender.

Twenty-seven states have passed laws banning or restricting transgender athletes from participating in the sports that are consistent with their gender identity.

In the 2024-2025 school year, about 175,000 Michigan high school athletes participated in sports, according to the Michigan High School Athletic Association. Two transgender students held waivers to participate and both participated only in fall sports.

“It brings up a lot of ‘whys,'” Jay Kaplan, staff attorney with the ACLU of Michigan’s LGBTQ+ Project, told UPI. “Why this inordinate amount of focus? Why does this seem to be a priority?”

Kaplan explained that the athletic association’s waiver system is already a mechanism meant to address concerns people may have regarding student-athlete participation.

“These budgetary provisions, they can be challenged as discriminatory,” Kaplan said. “Our message to these legislators is, ‘Do your job.’ What’s your plan for affordable housing? What’s your plan to bring more businesses to the state and improve the economy?”

The Republican sponsors of the proposals in the house, Rep. Tim Kelly and Rep. Gregory Markkanen, did not respond to requests for comment.

“Our local schools have been asking for the freedom to use state funding how they please, free of overregulation and burdensome government mandates,” Rep. Joseph Pavlov, R-District 64, said in a statement. “Now, thanks to the new budget plan House Republicans have put together, schools are getting exactly that in record amounts of funding. This will go a long way in turning around the decline in educational performance our state has seen for a long time now.”

Kaplan said the political makeup of the legislature and the governor’s office offers some assurance that provisions like the anti-trans house school budget proposal will fail in Michigan. Next year’s midterm elections will be crucial in determining if that level of assurance continues.

“We’re fortunate in Michigan,” Kaplan said. “We’ve done a lot of hard work. The LGBTQ community and allies, we’ve all worked together. Michigan has some very good policies for the LGBTQ. We have explicit civil rights for the LGBTQ. If anyone is singled out, we’re going to challenge it.”

Democrats have a 19 to 18 majority in the Senate with one seat — Senate District 35 — vacant. Whitmer, a Democrat, has the authority to call a special election for the vacant Senate seat, which she has not done.

Republicans took a 58 to 52 majority in the House in the 2024 election. Democrats held a majority in the House chamber since 2023.

Michigan will elect a new governor in 2026 as Whitmer will reach her term limit.

“What we’re seeing from the Republican side is the incorporation of national Republican policy coming from the White House regarding things like DEI initiatives and trans athletes,” Hanson said. “The fact that this is entering into state budget policies and money is tied to focusing on a minority group that is really small, it makes it seem like they’re focusing on things that aren’t really problems,”