"...Yet today, after dozens of tax cuts and massive job losses, Michigan nearly leads the nation in unemployment and is facing its worst state budget crisis since World War II."

More than a dozen years after lawmakers pulled apart the departments of Environmental
Quality and Natural Resources, legislation is proceeding to put the two back together.

The move, which supporters said could save the state up to $2 million, is getting mixed reviews
from those most affected.

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Grass-cutting along state roads is being scaled back this summer to trim costs, but the initiative is not expected to be very noticeable in West Michigan.

The Michigan Department of Transportation hopes to save $30 million in labor and fuel costs by mowing and trimming less often this summer. MDOT plans to focus on grooming for safety rather than appearance.

The MDOT's Muskegon Transportation Service Center, which covers Muskegon, Oceana and Newaygo counties, is cutting back, too. However, Maintenance Coordinator Dave Brinks said it will not be "drastic."

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Spending advocates say a tax increase is needed to balance Michigan's budget and avert fiscal catastrophe in 2011 when federal stimulus money propping up the state's finances runs out.

Business groups say the state budget is already being balanced on the backs of employers.

Those seeking to protect essential services in the long term or who say Michigan's economic future requires
significant business tax reduction seek an overhaul of the state tax code to accomplish their goals.

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About 100 Michigan State Police troopers will be laid off Sunday after a last-ditch effort to avoid the job loss failed.

Members of the Michigan State Police Troopers Association voted against a furlough plan that
would have temporarily cut their pay to avoid layoffs of low seniority workers.

The outcome of the vote was announced Friday, but vote totals weren't released.

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State Budget Director Bob EMERSON said he will "take a run at cutting" $1.5 billion in state spending for Fiscal Year (FY) 2010, but at the end of the day he said would be "surprised and shocked" if lawmakers can all agree on the same cuts.

Without that consensus, Emerson said he figures the talks will eventually turn to more revenue,
especially now that the administration claims it is serious about eliminating the Michigan Business Tax (MBT) surcharge.

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Bay City Public Schools will lay off a teacher and four classroom aides to balance its 2009-2010 budget.

"When we talk about a reduction in people, this is not a discussion that we've had in the past five years," said Superintendent Carolyn Wierda, who presided over her last meeting before she retires.

"These are great people and we will just have to combine current duties."

Trimming the budget became necessary as the state anticipates a reduction in school funding equal to about $110 per pupil. For the Bay City district, that amounts to more than $1 million.

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Lawmakers are expected to work late tonight on piecemeal approval of preliminary departmental
budgets before a two-week Fourth of July hiatus. Unfortunately, it's late in the game, and there's no
agreement between Gov. Jennifer Granholm and legislative leaders on an overall budget plan for
the next fiscal year, which starts Oct. 1.

This approach could lead to another gridlock like that of 2007, when tax increases were used to help resolve a big state revenue shortfall -- and that only after a brief government shutdown because lawmakers couldn't resolve their differences by the deadline.

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Legislative leaders agreed this morning at a quadrant meeting to set a new goal for the completion of
the Fiscal Year (FY) 2010 budget ‐‐ September 1.

The logic behind the move is apparently to set a "must act" deadline that is one‐month before the actual constitutional deadline of October 1. As one official familiar with the thinking said, "nobody wants to repeat 2007" and with the one‐month cushion, leaders hope they can avoid another one‐month‐long stand‐off followed by a shut‐down of state government, even if it was for only four hours.

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Tom Watkins has another good idea: Rename the state Department of Education the Department of
Health Care and Pensions, because meeting the soaring benefit costs of active and retired teachers is its major preoccupation.

"As it stands now, any new money that goes into education really just goes to cover rising health
care and pension costs," says Watkins, who runs a consulting firm focused on relations with China.
"That's where the education 'investment' has gone and will be going unless serious efforts of reform are addressed."

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Senate Republicans today passed close to $1 billion in overall gross cuts to K‐12 education and
community health in what caucus leaders said was a "realistic" budget shaped by the tough economic reality Michigan and its taxpayers are in.

The chamber's Democrats didn't buy it. They threw up nearly 30 amendments throughout the afternoon in a fruitless attempt to get parts of the money restored. In the end, the Democrats were able to get the Senate's three politically marginal members to take some tough votes, but that's about it.

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If Michigan continues to slash its way to a balanced budget, state services will be severely compromised.

Lansing lawmakers could be wrapping up a budget this week for the fiscal year that begins Oct. 1 and
heading off to a restful July 4 break. Finishing business at this early date would afford local governments and
school districts opportunity to plan for their upcoming fiscal years with some clear idea of the help they'll get from the state.

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Students and colleges asked lawmakers on Tuesday to hold off on proposed cuts to Michigan's main state-funded college scholarship, saying the cuts threaten aid to 96,000 students this fall.

The Republican-led Senate by a 19-17 vote approved a higher education budget that would eliminate funding for the Michigan Promise scholarship and also reduce funding for some need-based financial aid. Democrats who control the House said they would try to restore at least some of the program's money before the new fiscal year begins Oct. 1.

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Students currently eligible next school year for the state's $4,000 Michigan Promise scholarship
may not know for weeks how much cash they will receive, if any at all. The amount could be less; the number of students receiving it could shrink.

On a near party-line vote, the Republican-run Senate on Tuesday eliminated nearly all of the program's funding but signaled it was willing to negotiate a compromise during what will be a summer of budget talks.

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Michigan lawmakers are renewing debate about proposed cuts to state funding for scholarships and financial aid supporting thousands of college students.

A House appropriations subcommittee is scheduled to hear testimony Tuesday from groups that want to save the Michigan Promise scholarship program.

The Senate voted last week to
eliminate the program and save $140 million in the budget year that starts Oct. 1. The House may try to restore at least some money to the program designed to give up to $4,000 to qualifying students during their academic careers.

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To the rest of the country, Michigan is seen as being synonymous with the automobile. The birthplace of Ford, General Motors and Chrysler, Detroit and Michigan are known as a place where people take a lot of pride in their cars and trucks.

Yet, the roads these cars drive on have fallen in such disrepair they're being turned back to gravel in some areas.

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Even though Michigan voters have rejected a graduated income tax at the polls three times in the past
41 years, recent public and private surveys suggest the tide may have changed.

Several weeks ago, EPIC‐MRA published results showing 60 percent support for the concept.

And a Lansing source familiar with polling by a private business group reveals "overwhelming" support,
in effect confirming the EPIC‐MRA conclusion.

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Michigan's tax system does an increasingly lousy job of capturing what's happening in the actual economy. "What economy?" you ask. And it would certainly be foolhardy for anyone to talk about raising taxes now.

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Michigan's budget crisis threatens the very priorities Gov. Jennifer Granholm vowed to protect and promote. It is shredding the safety net, cutting basic services and, once federal stimulus money is gone, will threaten the education system that Michiganders so often list as their No. 1 priority.

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During our combined 44 years in the Michigan Legislature, we worked on both sides of the budget -- revenue and appropriations. Even in good times, we know from experience that the budget process requires careful balancing and tough decisions.

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Michigan would be better off with a graduated income tax. Depending on where the levels are set, the state would significantly reduce severe public education funding shortfalls as well as the business tax burden. A graduated income tax is as important to Michigan's economic recovery as retaining college graduates to fuel our knowledge-based economy.

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Your home value goes down, but your tax bill goes up. Who wouldn't get angry when that happens? But the fix offered by the state Senate would erode a homeowner protection that has kept property taxes reasonable in Michigan.

The Michigan Senate is calling for a vote on a constitutional amendment to change the way homes are taxed so that when housing values decline, property taxes go down immediately.

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It's all on the table when it comes to tax reform. But when it comes to balancing the state budget
without federal stimulus money, options are quickly falling off the table.

That's the news today from a quadrant meeting that included Detroit Renaissance and economist
Patrick ANDERSON as lawmakers seek out how Michigan's government can meet its financial needs while creating a more competitive tax structure.

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Voters would decide if property taxes can rise when home values decline if a constitutional amendment passed Wednesday by the state Senate makes it to the November 2010 ballot.

The measure won approval 29-8 in the Republican-led Senate and moves to the Democrat-led House.
Two-thirds, or 74, of the chamber's 110 representatives would have to back the proposal to put it before voters.

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Senate Republicans didn't have the luck of the Irish on Tuesday with their property tax cap measure, but
they emerged victorious today.

SJR H passed 29‐8 today, garnering four more votes than the two‐thirds required for passage. Sens. Irma CLARK‐COLEMAN (D‐Detroit), Ray BASHAM (D‐Taylor) and Dennis OLSHOVE (D‐Warren) flipped their votes from Tuesday, when the vote was 23‐11 (See "Property Tax Cap Fails In Senate," 3/17/09).

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Given a chance to pay nine cents more per gallon to fix Michigan's roads, voters opted to throw up the
stop sign, according to a poll conducted for MIRS.

Of 600 voters asked between Mar. 9 and14, 59 percent said they would oppose a nine‐cent‐per‐gallon
gas tax increase, while 36 percent said they'd support it. The remaining 5 percent were undecided,
based on the Denno‐Noor survey.

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Just a couple days after fiscal agencies revealed tax revenues are off by $200 million this year, the
Senate OK'd tax breaks worth at least $400 million.

The Senate today approved legislation aimed at helping mid‐size businesses, car sales and homeowners (See "GOP Panel Backs $250M In Tax Breaks," 3/5/09). As always with tax policy, the debate became heated with Republicans arguing that the current tax system was killing businesses, and Democrats
responding that they were breaking the state bank.

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The 22 percent Michigan Business Tax (MBT) surcharge created in 2007 to balance the state's budget
likely caused Michigan to tumble five spots in a ranking of state governments' business tax burden.

The third‐ever State Business Tax Burden Rankings for 2008 compiled by the Anderson Economic Group
(AEG) put Michigan at 22 for lowest tax burden during Fiscal Year (FY) 2006, but AEG founder said the
number didn't include any taxes or fees that were passed the following year.

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The last month or so hasn't been pretty for the state's economy with unemployment surging up to 11.6
percent in February. That economic malaise is starting to show up in a big way in state revenue
collections.

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Gov. Jennifer Granholm Wednesday ramped up her support for changing the state gasoline tax from a flat 19 cents a gallon to a proportional rate that would raise more money for
road repairs as gas prices rose.

Granholm, speaking to reporters, said Michigan's roads "are the pits."

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Noting that state roads are "the pits," Gov. Jennifer Granholm said Wednesday that she supports changing the state gasoline tax to raise more money as gas prices rise.

Granholm told reporters that the state's current 19-cent-per-gallon tax doesn't raise enough money
to repair Michigan's aging roads.

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If the state replaces its flat 19‐cent‐per‐gallon gasoline tax with tax that's based on a percentage of
gasoline's wholesale price, that's not a tax hike, Gov. Jennifer GRANHOLM said today.

Asked today by reporters to address her support for a Transportation Funding Task Force recommendation to change the way gasoline taxes are collected in Michigan, Granholm said that the
day the gasoline tax conversion plan is passed, the size of the percentage tax will be set to yield exactly the same amount of money the state's current 19‐cent‐per‐gallon tax yields (See "All Aboard The Gas Tax Shift," 03/03/09).

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While much attention focuses on state and federal budget problems, in many cases the challenges
to our local units of government are even more extreme because they have less control over the laws under which they must operate.

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The economy would have to sink pretty low for the head of the Senate Appropriations Subcommittee on
General Government to consider cutting revenue sharing.

"That is the absolute last thing I will look at," Sen. John Pappageorge (R‐Troy) vowed to MIRS. "The first responsibility of government is safety and health and that's what revenue sharing does. . . . That's
the last thing we want to cut."

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Western Michigan University junior Abby Achterhoff thought her college expenses would be covered by an investment fund set up when she was 5 years old.

"It just didn't work out that way. ... This semester I was $400 short," said the Muskegon native, who said she did come up with the several hundred dollars needed to make ends meet.

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Cost-cutting smokers soon will pay a whole lot more to roll their own cigarettes.

And Gov. Jennifer Granholm wants to make them pay even more.

She has called for doubling the state tax on loose tobacco, cigars and snuff to help balance next year's
state budget. That's on top of whopping increases in federal tobacco taxes -- including those for
manufactured cigarettes -- that take effect April 1 to pay for expanding health insurance for low-income
children, known as SCHIP.

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As the Lansing State Journal seeks input from readers on how best to balance the state’s budget, it is
important that readers and Journal staff take a step back and look at what has already happened to the
state’s budget this decade.

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Twenty‐one days after the Senate passed a bill killing the Michigan Business Tax (MBT) surcharge, the
Senate Finance Committee contemplated a big MBT tax credit for mid‐size businesses.

The committee today heard testimony on SB 0069, sponsored by Chair Nancy CASSIS (R‐Novi), who said it would help small businesses that create 80 percent of Michigan jobs. She also argued that it was superior to targeted tax breaks for industries like film companies, because the legislation is broad‐based.

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For Gov. Jennifer GRANHOLM to ask the state's 15 public universities to freeze tuition in 2010 at the
same time they take a 3 percent less in state appropriations creates a situation where "the math doesn't
work," said Mike [BOULUS], executive director of the President's Council today.

Granholm sliced university appropriations $100 million in the Fiscal Year (FY) 2010 budget she proposed today. The cut means an appropriations slice ranging from 4.19 percent (Lake Superior State) to 3.09 percent (University of Michigan‐Ann Arbor) for the individual universities.

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Bars and stores could sell alcohol between 2 and 4 a.m. and before noon on Sunday with a special
permit as part of Gov. Jennifer GRANHOLM's 15‐piece, $231 million revenue enhancement proposal that's called for in her Fiscal Year (FY) 2010 budget.

The Budget Office believes extending alcohol sales into the 2‐to‐4 zone will bring in $4.6 million in state revenue. Letting stores sell alcohol before noon on Sunday could bring in $9.1 million more.

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Gov. Jennifer Granholm’s 2009-10 budget gets unveiled at 11 a.m. Thursday.

We already know the governor plans to close three prisons to save money in the fiscal year that begins Oct. 1. It will be interesting to see where else she chooses to go in order to close the $1.6-billion budget gap the state is facing. I expect she will cut back per-pupil spending for K-12 schools. She may try to hold higher-ed funding steady, as part of her request to the community colleges and universities to hold tuition steady, but that hardly seems possible. Almost everywhere, I expect there will be some real blood on the floor from cutbacks.

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Budget Director Bob EMERSON is poised Thursday to present to lawmakers a menu of cuts designed to fill roughly half of the projected $1.4 billion hole in the Fiscal Year (FY) 2010 budget, according to information collected today by MIRS.

Roughly $600 million in General Fund cuts is on the table, with the state's 15 universities on the
chopping block for a 3 percent slice. The Department of Corrections is on the hook for roughly $120
million in cuts and the department of Community Health and Human Services roughly $100 million a
piece.

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President Barack Obama could have easily been talking about Michigan in his inaugural address
when he declared, "Our time of standing pat, of protecting narrow interests and putting off unpleasant decisions -- that time has surely passed."

We know the "State of the State"; it is a mess. Michigan, which has led the parade of economic decline for a decade before the nation caught up, has been putting off tough decisions to deal with our structural budget crisis. The special and narrow interests have beaten back attempts of real reform, continuing to pretend and spend as though nothing has changed -- when everything has changed.

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There's new evidence that Michigan roads are crumbling faster than they can be fixed.

Facing high repair costs and a funding crunch, a growing number of counties are being forced to
cut road maintenance and staff to match their austere budgets. Eight in 10 counties are reducing
maintenance and construction, nearly two-thirds are cutting back on replacement of hard-surface
roads, and three-quarters are reducing or eliminating equipment purchases, according to a survey
by the County Road Association of Michigan released Monday.

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What do you do when a road is horribly bombed out with potholes but there's no money in the till to
repave it? You turn it to gravel, and that's exactly what 23 county road commissions admitted to doing
last year, an increase from the 11 who used the tactic in 2007.

The number of county road commissions that have been forced to cut services in 2008 skyrocketed from the year prior, with nearly 80 percent of the state's 83 counties reducing maintenance work and two-thirds scaling back on road surface replacement, according to the results of a survey released today from the County Road Association of Michigan (CRAM).

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More Michigan county road agencies are letting paved roads revert to gravel and taking other drastic measures because of road funding shortfalls, according to a survey released today.

The County Road Association of Michigan said its survey found that 23 counties, mostly in northern or
western Michigan or the Upper Peninsula, returned paved roads to gravel in 2008 because they didn’t
have resources to keep the pavement in safe driving condition. The year before, only seven counties
made that decision.

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Students at Michigan's universities are being asked to shoulder ever‐larger shares of the cost of their
education, according to a new report.

The cost of higher education per Michigan student has actually declined between 2002 and 2006,
according to the Delta Project on Postsecondary Education Costs, Productivity and Accountability, an
independent nonprofit organization based in Washington, D.C.

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Gov. Jennifer Granholm said Tuesday that Michigan's struggling economy is growing more
diversified, with new jobs cropping up in movie studios, solar panel plants and centers where electric car
batteries are being designed.

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Gov. Jennifer Granholm offered today a glimpse at how she'd like to see state government reorganized under a reform effort she launched in her State of the State address
Tuesday night.

Granholm said in her message to the Legislature she wants Lt. Gov. John Cherry to lead an effort
to reduce the number of state departments from 18 to eight during the next couple years. In a
meeting with The Detroit News editorial board, she identified those eight areas she sees as central
to state government's mission.

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"It's a time for relentless focus and discipline," Gov. Jennifer Granholm stated soberly Tuesday night
as she cut the salaries of elected officials 10%, vowed to pare 18 state departments down to eight,
cut funding for state fairs and shut down three more prisons.

To which Michigan business leaders replied: It's about time. And then asked: Is all that enough to close a looming $2.5-billion budget gap over the next two years?

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Gov. Jennifer Granholm, in her State of the State message Tuesday, called for a major restructuring of state government. The state's chronic budget deficits require nothing less, and the governor was right to do so. But action on such a restructuring has to begin now.

The governor called for what she termed "a comprehensive effort to dramatically change the shape
and size of state government" to be headed by Lt. Gov. John Cherry. That's an important exercise,
but it would have been more useful had it been done several years ago, not in the penultimate year of her last term in office.

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Gov. Jennifer GRANHOLM assured citizens this evening that a slimmed‐down state government will lead the economically tattered state deep into the bright fields of alternative energy.

The picture Granholm painted in her seventh State of the State message has Michigan using 45 percent
less imported fossil fuels by 2020 in the generation of electricity by making it worth while for homeowners and business owners to replace thin windows, install better light bulbs, caulk cracks, install solar panels on their rooves or plop a wind turbine in their back yard.

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Officials representing state universities tiptoed on the balance beam today in reacting to Gov. Jennifer GRANHOLM's latest tuition restraint pledge in which schools that keep tuition low would be rewarded with federal economic stimulus money.

Not far from their memory banks is the reneged 2004/05 tuition guarantee, in which all 15 schools
vowed to keep their tuition levels under the rate of inflation in order to receive a 3 percent state funding
increase during the Fiscal Year (FY) 2005 appropriations. Only five months later, Granholm was back at higher education's doorstep with a two‐year $60 million cut in exchange for more than $200 million in infrastructure bond revenue (See "Promises Made, Promises Broken?" 2/10/05).

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Gov. Jennifer Granholm wants to eliminate state funding for the 160-year-old Michigan State Fair, slash elected officials' pay by 10 percent and slim down state government from 18 departments to eight.

The proposals, to be outlined in her seventh State of the State address Tuesday, underscore the gravity of Michigan's budget crisis, and the impact of the national recession on this state.

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The Republican‐led Senate is wasting no time in pushing its No. 1 priority of the 2009‐10 legislative
session.

Legislation that erases the 22 percent Michigan Business Tax (MBT) surcharge is expected to move out of the Senate Finance Committee after a Tuesday hearing in a move that Chair Nancy CASSIS (R‐Novi) said emphasizes the caucus' top job.

Cassis said she would call a vote on SB 0001 after the hearing.

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Michigan's top business organizations urged Gov. Jennifer GRANHOLM and legislators to pass long‐term structural reforms and spending cuts as they prepare to begin work on the Fiscal Year (FY) 2010 state budget, claiming they've found $1.6 billion in cuts and reforms that could be made.

The business leaders stressed the need for immediate attention to these reforms and are seeking
meetings with Granholm, Speaker Andy DILLON (D‐Redford Twp.) and Senate Majority Leader Mike
BISHOP (R‐Rochester) to press their case for changing how Michigan budgets its resources.

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An upcoming federal stimulus package is expected to help ease Michigan's state budget crunch.
But state politicians caution against relying too much on the federal plan, saying Michigan officials must make
tough decisions to contain government spending regardless of what help may be coming from Washington.

The economic stimulus plan developing in Congress and backed by President-elect Barack Obama could cost $825 billion or more in spending and tax cuts over a two-year period. It's not yet known how much money will come to Michigan in the final package.

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If the state’s budget isn’t balanced over the next two years, then every legislator and the governor should vow to return every dime they’ve been paid.

They should admit that if they won’t balance the budget, then they don’t deserve to steal the taxpayers’
money.

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Job One for the Michigan Senate this year is dumping the Michigan Business Tax (MBT) surcharge by the 2010 tax year.

"Between myself and the Majority Leader [Mike BISHOP R‐Rochester), this is the No. 1 priority," said
bill sponsor Sen. Mark JANSEN (R‐Grand Rapids).

SB 0001 phases out the 21.99 percent tax in two years, first dropping it to 11 percent this tax year. Last year, Jansen headed up a task force on the surcharge and introduced a similar bill, which would have chucked the tax in three years. He's sticking to the same time frame.

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House Speaker Andy DILLON (D‐Redford Twp.) today outlined an aggressive agenda for the early months of 2009 in his opening address to his House colleagues.

The highlights of the speech were Dillon's challenges to Senate Majority Leader Mike BISHOP (R-Rochester) and Gov. Jennifer GRANHOLM to work with the House to bring about several reforms. In the
speech, he challenged them to:

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Aid to public schools will not be cut this year despite continuing state budget woes, Gov. Jennifer Granholm said today.

"For this year, we are not going to pro-rate K-12," the governor said during a late morning news
conference. "But all bets are off for next year."

More than $700 million in carryover cash from last year and the federal stimulus package to the
states expected to win passage in Congress, possibly next month, may eliminate the need to make
any budget cuts for this year, Granholm added.

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If the Michigan Municipal League (MML) has its way, the first dollars the state gets from the expected
federal stimulus package should be used to fix the state's infrastructure, not add to it.

In a news release today the MML said that in more than 120 developed communities across Michigan there are 1,200 proposed infrastructure projects that require $3.33 billion to complete.

"Projects include urgently needed repairs and upgrades to roads, bridges, water and sewer systems,
utility lines, public safety facilities, lighting systems, and more," the news release stated. "Addressing
those projects first will create thousands of jobs, encourage business investments, reduce pollution and improve energy efficiency in communities with aging infrastructures.”

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The Michigan Business Tax (MBT) could be targeted for repeal after only a year on the books.

A member survey by the Grand Rapids Area Chamber of Commerce (GRACC) found that eliminating the fledgling tax should be the top policy issue for the Chamber in 2009, having been derided by business
owners as "too complex."

"We need to reduce the cost of doing business in this state," said GRACC President and CEO Jeanne
ENGLEHART.

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A measure to prohibit property taxes from going up on homes when the value of the home goes down
will happen one way or another, be it through legislation or the ballot, proponents told MIRS.

"I believe the people of this state are not going to be patient about this," Rep. Brian CALLEY (R‐Portland)
told MIRS today. "If the stakeholders in Lansing want to have a say on this ‐‐ they'll need to come to the
table."

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The state budget is still close to $200 million out of whack this year and is $1.4 billion in the red
for the upcoming Fiscal Year (FY) 2010, according to estimates released today by the state's
fiscal analysts.

According to the results of this morning's Consensus Revenue Estimating Conference (CREC),
the tanking of the U.S. and Michigan economies is causing forecasters to paint a dire picture for state tax collection during the remainder of the current FY 2009, which ends Sept. 30 and FY 2010.

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Remember that $1.48 billion tax increase of 2007?

The sour national and state economies of 2008 ate it for supper and then burped out a nearly $200
million hole in Michigan's budget this year and a whopping $1.4 billion deficit for the coming Fiscal Year (FY) 2010.

The good news is the federal government could show up with the Pepto Bismol, for this year and next,
at least.

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The Fiscal Year (FY) 2009 hole just got a little less deep.

The State Budget Office reported today that the state closed FY 2008 with $712.5 million in the bank
between its two major operating funds ‐‐ the General Fund and the School Aid Fund ‐‐ more than $500
million over the $200 million originally projected.

"It's good news based on the changes in the economy," said Budget Office spokeswoman Leslee FRITZ. "We had some revenues that came in above projections and some departments that are fiscally responsible."

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Michigan's jobless rate will top 11 percent in each of the next two years and state tax receipts this year will come in $870 million below estimates made in May due to the languishing economy, according to a revenue forecast released Wednesday.

The House Fiscal Agency report says unemployment in Michigan, which was 8.4 percent in 2008,
will rise to 11.3 percent this year and 11.4 percent in 2010. The jobless mark will peak at 11.7
percent in the first quarter of 2010, the report predicts.

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Gov. Jennifer Granholm has all but ruled out a gas tax increase this year, as she has before. Her
refusal to make hard and sometimes unpopular calls, even in her final term, could cement her legacy as a governor who watched Michigan's transportation systems dangerously deteriorate.

Dismissing a gas-tax increase before the new legislative session starts is both poor policy and lousy
politics. Instead, her representatives should be meeting with legislative leaders of both parties -- twisting arms if necessary -- to work out a plan that the state House and Senate could approve. A
spokesperson for the governor said Granholm has supported pegging gas taxes to wholesale costs
instead of gallons at the pump -- a move that eventually could increase transportation revenue.

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The Michigan House Fiscal Agency said Wednesday it expects the state will take in significantly less money than expected this fiscal year because of the worsening economy.

The nonpartisan agency said in a new report that it expects state revenues to be about $870 million less than state economists predicted last May, a drop of 4 percent.

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Michigan's total general fund and School Aid Fund revenues could drop by more than $1.5 billion in two
years, from the 2007‐08 to 2009‐10 fiscal years, the House Fiscal Agency said Wednesday.

The estimate, released two days before the state's first 2009 Revenue Estimating Conference, mirrors in many respects the fiscal forecast issued last month by the Senate Fiscal Agency.

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Michigan lawmakers are ringing in the new year with some old business hanging over their heads.

During the two-year 94th Legislature, which officially ended in a brief ceremony at noon Tuesday,
they introduced 4,445 bills and passed 533 new laws. Any bill that wasn't passed must be reintroduced and start its journey all over again.

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The economy is wreaking havoc with bottom lines in school districts across Metro Detroit, forcing them to find ways to dig out of soaring projected budget deficits.

To erase the deficits, districts have devised plans that include laying off teachers, consolidating schools and canceling transportation for kindergarten students. All are trying to balance budgets without cutting academic programs.

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After collecting dust the last three months in the House Clerk's office, HJR III finally found its way to the
Senate where it was officially left to die.

The measure would have allowed Michigan voters in 2010 to stop annual property tax increases on land that decreased in value that year. If on the ballot, it's widely accepted the measure would have passed, particularly after a year like 2008, when many homeowners were forced to cough up more in taxes for their depreciating property.

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Lawmakers have approved Gov. Jennifer Granholm's plan to cut $146 million from the state budget, including the closure of prison facilities in Ionia and Coldwater.

The plan reduces state spending on welfare programs by more than $63 million, due largely to fewer cases as a result of tighter eligibility requirements, officials said.

Ionia City Manager Jason Eppler said city officials still are assessing the potential impact of losing itsDeerfield Correctional Facility, one of five prisons in the Ionia area. But he said a worst-case scenario for his city could be as much as $250,000 in lost revenue for the city.

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Gov. Jennifer Granholm will propose $140 million in state budget cuts today, including the closure of a state prison and a prison camp, along with reductions in welfare payments, according to acopy of the plan obtained Tuesday by the Free Press.

Granholm's executive order will spare public schools, universities and revenue sharing to local communities from any cuts.

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The $120 million to $150 million in budget cuts Gov. Jennifer Granholm is expected to present to lawmakers today do not begin to address state government's financial problems.

As her aides note, they aren't even intended to fully handle the projected revenue shortfall in the current budget. If they are a prelude to a more serious and thorough review of state spending, OK. But they look like merely another stopgap move in a long series of efforts to paper over Michigan's structural spending problem.

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Gov. Jennifer Granholm's budget director on Wednesday unveiled $134 million in state government spending cuts, including the closure of a state prison in Ionia and a
prison camp in Coldwater.

The executive order was proposed at a legislative hearing Wednesday afternoon.

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Deerfield Correctional Facility in Ionia and Camp Branch in Coldwater would close in April
under a budget-cutting plan set to be released by Gov. Jennifer Granholm at noon today.

The two facilities, designed to house nearly 2,000 male inmates, can be shuttered because of declines in Michigan’s prison population, state officials said. Both are minimum security facilities.

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House and Senate leaders today OKed the Governor's plan to squeeze $145.7 million out of this year's budget, but Budget Director Bob EMERSON conceded that he's expecting more cutting in early 2009 and the Senate Fiscal Agency (SFA) reported it sees a $265.5 million hole left unfilled.

The Budget Office used the number $240 million in documents shared with the joint House and Senate
appropriations committee this afternoon. But Emerson stressed the state's fiscal situation is too fluid
and the help Michigan can expect from the incoming Barack OBAMA administration is too great of an
unknown.

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Unable to push prison savings through the full legislature, the Gov. Jennifer GRANHOLM administration
wants to do it through the Executive Order (E.O.) route and the appropriations process.

In presenting roughly $135 million in mid‐year cuts noon Wednesday to a joint meeting of the House
and Senate appropriations committees, Budget Director Bob EMERSON will propose at least $26 million in cuts to the Department of Corrections (DOC), including the shuttering of one mid‐Michigan prison and one southwest Michigan camp, which combined will save $20.7 million.

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Budget Director Bob EMERSON will present a long‐awaited budget‐cutting executive order noon
Wednesday to a joint legislative panel, and at first blush, the knife isn't going to be cutting as deep as
feared.

State Treasurer Bob KLEINE and Emerson told the Governor today the projected General Fund hole in
the current Fiscal Year (FY) 2009 budget is $240 million despite revenue projections being $540 million off from May estimates.

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More Michigan Business Tax (MBT) changes are on the table, as the Senate Finance Committee is
weighing both technical and more substantive changes. The panel today unanimously moved SB 1440, sponsored by Chair Nancy CASSIS (R‐Novi), which would decouple part of the federal stimulus from the MBT. The definition of "federal taxable income" would no longer include a depreciation deduction for certain property. The bill is tie‐barred to SB 1038, high on
the Senate Republicans' wish list, which would change the definition of gross receipts to eliminate what
they call a tax on a tax.

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A fascinating - and perhaps frustrating - report came out of the state Capitol last month. Its
two-second conclusion:

State employees are in some measure underpaid. And state benefits (think health care) are not
necessarily more generous than private-sector bennies. Say what?

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Now that Michigan could be in line for relief from the federal government ‐‐ which could be $600 million or more ‐‐ Senate Republicans are nervous that the Governor won't make good on her promise to cut the budget.

MIRS has learned the state's $400‐plus million Fiscal Year (FY) 2009 budget gap dominated the GOP caucus this morning. Gov. Jennifer GRANHOLM has spent the last two days at a National Governors Association meeting with the incoming administration, with state leaders lobbying for $136 billion in federal stimulus.

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Michigan’s state budget remains a mess. And your legislators are becoming masters at ignoring
the problem.

A couple of weeks ago, the Democrat-led House passed HJR III, “a constitutional amendment
that would stop an increase in the property tax if a home’s assessed value decreased starting in 2010.” This move would have a huge impact on revenue for local governments. Did the House
members who voted 101-0 for it make provision for this gap?

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Here we go again.

After all the wailing and gnashing of teeth last fall, the Michigan Legislature adopted a "balanced
budget", but didn't do much to fix the chronic structural budget deficit that's baked into Michigan's
level of spending and taxing.

According to the well-respected Citizens Research Council, without big changes, our structural
budget deficit will balloon to $9.6 billion by 2017, just about the size of today's entire General Fund.
And this doesn't count the effects of the Wall Street meltdown or the coming national recession.

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Department of Transportation (MDOT) Director Kirk STEUDLE released a video to his employees this week, urging them to pass on the information "to everyone that would listen" that the state's road
funding situation has reached the "crisis" stage.

According to Steudle, while there has been a lot of talk referring to the funding shortfalls as "problems,"
the situation is much more dire and is in need of immediate attention.

"We're past those stages now, and it has reached the level where we are facing a funding crisis. It is the
reality of the situation and we can't gloss over it, or sugar‐coat it," Steudle said.

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Freshman enrollment is at an all-time high at colleges across the state, forcing Michigan Tech to
rent space at a local hotel to accommodate students while Central Michigan and Grand Valley
State universities are putting up new dorms to meet demand.

But trouble looms.

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House and Senate Republicans today called on House Democrats to take a break from campaigning and pass SB 1038, legislation that would repeal the surcharge on the Michigan Business Tax (MBT).

Yes, it's Oct. 8 of an election year and if the House Democrats returned to the Capitol right now to pass a measure such as SB 1038, it would be unheard of. However, the context the Republicans were
attempting to create was that it's crisis time in the nation and in Michigan, so the politics‐as‐usual
approach shouldn't apply.

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The Senate passed bills Thursday to accelerate the phase-out of a surcharge on Michigan's main business tax, and provide tax relief to an estimated 50,000 Michigan companies.

The passage was a mostly party-line vote led by the Republican majority. Under the more-prominent of the two bills, a 22 percent surcharge on the Michigan Business Tax would be eliminated over a three-year period, rather than over 10 years.

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As promised, Senate Republicans on Thursday voted to more quickly phase out a 22 percent surcharge that was added to Michigan's business tax to help resolve last year's budget crisis.

The move delighted the business community and garnered some Democratic votes, too. The
unresolved question: How to offset the loss of hundreds of millions of dollars in tax revenue for state government?

The legislation passed 26-12 and was sent across the Capitol to the Democratic-led House. A
spokeswoman for Democratic Gov. Jennifer Granholm said she would be open to Michigan Business Tax adjustments if they were "pared with reforms that can save the state money."

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Senate Republicans intend to launch an offensive today on Michigan's 9-month-old
business tax in reaction to some taxpayers who say the new levy is exorbitant, complicated and
driving them out of the state -- or out of business.

The Senate is expected to pass as soon as today a bill to accelerate the phase-out of a 22-percent
surcharge to three years, rather than 10. The surcharge, which treasury officials say will take in $722 million this year, was enacted as an add-on to the new Michigan Business Tax last year, to help wipe out the state budget deficit.

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Set against tensions over the financial sector meltdown, the Senate today exploded in partisanship over business tax cuts.

Legislation repelling the Michigan Business Tax (MBT) surcharge was jammed through the Senate, but
not without a fight. The GOP also tossed in up to $150 million in cuts to the MBT, which Democrats
decried as handouts to securities brokers, who have been impacted by the now‐imploding mortgage
market.

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A Republican-controlled Senate committee on Thursday voted to phase out a surcharge on Michigan business taxes over three years and to cap new tax breaks used to attract moviemakers to the state.

Democratic Gov. Jennifer Granholm immediately opposed any effort to rein in the film incentives.

"Let's give film a chance," spokesman Liz Boyd said.

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Senate Majority Leader Mike BISHOP (R‐Rochester) played the role of dismayed dad today, frustrated with his unruly brood for lacking discipline on the state's fiscal future.

It should have been a good day, with the Senate signing off on the last budget of the year six days in
advance of the Sept. 30 deadline. The Department of Transportation (MDOT) budget sailed through 37‐
0, after months of haranguing over language pertaining to the Detroit River International Crossing
(DRIC).

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The initiative to create an airport city surrounding Detroit Metro Airport is gaining momentum. But if the Detroit Aerotropolis is going to become the preferred Midwest logistical transportation hub over Chicago, the state needs to take better advantage of existing airport infrastructure and promote the development through tax incentives.

The proposed Aerotropolis would cluster air commerce business near Detroit Metro and other airports in a 60,000-acre development in Wayne and Washtenaw counties.

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Declining enrollment and dismal financial forecasts will force theBloomfield Hills School District to close two schools next year, officials said.

A third school must be shut down in the next few years. District spokeswoman Betsy Erikson projects the closings will save the district $600,000 each for elementary schools and $800,000 each for middle schools.

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Macomb County began its first major round of budget bloodletting Tuesday by signaling plans to eliminate the parks department -- a move that could mean an end to the county-hosted events at Freedom Hill Park such as the Italian Festival and Harley Fest.

In an effort to offset major operating deficits expected in the next two years, the budget committee voted to ax the department -- meaning the elimination of seven full-time jobs and up to $1 million in savings.

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After months of wrangling over the familiar Detroit River International Crossing (DRIC) project, we now
have a Department of Transportation (MDOT) budget.

The House passed HB 5808 today 107‐0 and the Senate is expected to follow suit on Thursday. That
means the last departmental budget will be signed into law well before the Sept. 30 deadline. If all goes according to plan, there will be no repeat of last year's mess and no department shut down.

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With state gas tax revenues declining and federal aid for road projects expected to dip significantly, the county Road Commission is planning to spend significantly less on road projects next year.

Commissioners will hold a public hearing on next year's Road Commission budget Thursday.

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Kill the Michigan business tax and cut state spending. That was the top
priority to emerge from the two-day West Michigan Regional Policy Conference.

The live voting session produced few surprises as several hundred people used handheld keypads
to prioritize what's being billed as a regional playbook to share with legislators.

"I feel great about the process," said Brian Harris, president of H&H Metal Source in Grand Rapids. "About how it came out, I can't tell you. The greatness of how it turns out depends on how many people get involved."

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If you want to give more money to the state, the state should make it easy to do, said Sen. Nancy CASSIS
(R‐Novi) today.

Republicans on the Senate Finance Committee today moved a four‐bill package that creates three new
income tax check offs that allow taxpayers to give some of their income tax return money to the General Fund, the School Aid Fund or the Higher Education Fund.

"I believe taxpayers are more than capable of making decisions on where they want to charitably give
their money," Cassis said. "We hear that the people are willing to pay more in taxes to help state
government. This gives them the opportunity."

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The projected hole in the Fiscal Year (FY) 2010 General Fund budget, as of today, is $308.6 million, the Senate Fiscal Agency (SFA) reported to senators today, a number that is contingent on the economy growing three percent and lawmakers freezing spending at FY 2009 levels.

SFA Deputy Director Ellen JEFFRIES warned the Senate Appropriations Committee today that the FY 2010 budget, which lawmakers will begin work on after Gov. Jennifer GRANHOLM presents a proposed spending plan this winter, will not have the benefit of several one‐time revenue sources used to balance the FY 2009 budget.

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If somebody said you could save six cents on every dollar you spend on gasoline, would you take it?

But would you still take it if the trade off included a one‐penny sales tax increase?

That's one of a myriad of ideas being floated as a special task force considers new funding alternatives
for Michigan's road infrastructure. Sen. Jud GILBERT (R‐Algonac) is one of those floating the tax trade‐off
scheme.

"Certainly, I've talked about it, but I'm not prepared to endorse it," he told MIRS.

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The special legislative task force looking for alternative revenue sources for Michigan's roads began
preliminary voting on a variety of recommendations Monday, which will not include a gas tax increase
but could include a local gas tax option.

Task force co‐chair and Michigan Chamber of Commerce President Rich Studley opposed the local
option because he said he believes it is "so easily avoided" by motorists.

Gaining more support were local funding options using driver registration fees and a hike in driver's license costs. But the task force will tell lawmakers that local revenue sources are "not a substitute" for state funding sources.

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Low‐skill workers who are downsized out of jobs are told that they need retraining in growing sectors of the economy. But they often face hurdles navigating through an often‐confusing financial aid puzzle that is geared toward younger students, according to a new study.

Workers in need of remedial education or just a few classes to help them brush up on skills find
themselves completely out of luck in getting loans or scholarships to pay for the classes, according to the
Michigan League for Human Services' (MLHS), "Importance of Postsecondary Education Increases While Financial Aid Eludes Many."

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As Michigan workers continue to lose their jobs and look toward re-training or additional education as part of their next career move, there are not many options for those people to receive financial aid toward those endeavors, according to a new report by the Michigan League for Human Services.

The league's report, released Monday, shows that the bulk of financial aid is geared toward the traditional high school graduate who is going off to college and not an adult who faces child care, transportation and other barriers
to going back to school.

The report also found that demand for programs aimed at those non-traditional students, such as No Worker Left Behind or Jobs, Education and Training (JET), is higher than what's available.

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The task force charged with finding money for Michigan's road repairs will "roll up its sleeves" and make
some decisions on new revenue sources starting Sept. 8.

The nine‐member group has been ordered by the Legislature to find new and alternative means of
raising transportation money, which basically leaves the state's motor fuel tax out of the mix.

And one of the task force co‐chairs predicts that the days of the 19‐cent state gas tax are numbered.

"Even without the most recent spike in gasoline prices . . . we're clearly at the beginning of the end of a
transportation system that is funded primarily through user fees on motor fuels," said co‐chair Rich
STUDLEY, the Michigan Chamber of Commerce president and CEO.

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The Department of Treasury has set a Nov. 1 target date to have all of its forms and instructions completed on the Michigan Business Tax (MBT), a new tax that lawmakers agreed to create 14 months
ago (See "New Business Tax Deal Reached," 6/13/07).

Does that seem like an extraordinary amount of time to create a form? The chair of the Senate Finance Committee, Sen. Nancy CASSIS (R‐Novi) said she thinks it may be and wants to get to the bottom it.

Treasury Spokesman Terry STANTON said the Department has made it clear over the last several weeks that Nov. 1 is its target date to get together the final paperwork businesses will be asked to fill out when filing its Michigan business taxes.

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A one‐cent hike in the state sales tax would replace the state's 19‐cent gas tax under one of the options
being considered by a special panel charged with finding ways the state can pay to fix its crumbling roads.

Bumping the sales tax to seven cents from six cents would require a constitutional amendment, but
could raise about $1.1 billion a year for transportation coffers and is only one of the options on the table.

When the special transportation task force gets together Sept. 8, it will consider a myriad of alternative
options to review, including the sales tax option.

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Changing the Michigan Business Tax (MBT) to prevent businesses from being taxed on the state taxes
they collect is among the top priorities for Senate Republicans as they gear up for the limited fall sessionand lame duck.

The upper chamber sent to the House last February SB 1038, which tightened the broad definition of what a business was required to pay tax on under the fledgling MBT. The Department of Treasury, which
opposed the bill, estimated the legislation as being a $150 to $200 million hit to the budget.

Last May, the Democratic‐controlled House kicked the bill back to the Senate with tie‐bars to the much debated Kreiner bill and legislation making a series of election reforms the Republicans curled at.

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A long‐targeted piece in a patchwork of solutions to fund Michigan roads has dropped into
the Legislature.

And it's none too soon, as state and local road agencies juggle budgets strained by reduced gas‐tax
revenue, escalating construction costs and continuing road needs.

State House bills introduced in late July would give counties a host of local funding options, including a
3‐cent per‐gallon gas tax, a 1 percent sales tax, a real‐estate transfer tax based on a home's value, and local driver's license and vehicle‐registration taxes. The taxes are subject to local voter approval.

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The state must increase its attention to infrastructure or risk losing future economic development investment, business leaders say.

We can pay now or pay later. If Michigan chooses the latter option, the bill to fix its crumbling roads, bridges and other pieces of the transportation infrastructure could go higher and exact an even steeper price by undercutting efforts to rebuild the state's ailing economy.

"We have got a real dilemma," said James Koslosky, manager at Gerald R. Ford International Airport in Grand Rapids.

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If Michigan's road-funding system is going to continue to spur growth, it has to be fueled with more than
declining gas tax revenues. Current, and no doubt future, gas pump prices have forced people in new
directions: fuel-sipping vehicles, public transportation, pedal power, walking. These changes have driven
gas-tax receipts into the basement. The primary beneficiary of gas taxes -- road building and repair -- has
suffered.

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Members of a special transportation panel appointed by the governor have concluded that Michigan must spend more money if it is to have a viable transportation system in the future and to obtain a fair share of federal matching funds. They're right -- but any new revenue devoted to maintaining and improving roads and other transit needs must be spent more intelligently than it is now.

A report released Monday by the Citizens Advisory Committee on Transportation noted that state
and local governments in the next few years could lose close to a billion dollars annually in federal funding for a lack of state funds to match the federal money. By 2015, projected revenue will cover about 4 percent of needed road repairs. Commercial airline flights will be canceled and the shipment of freight will continue to be inefficient unless there's more investment.

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In the midst of economic downturn, layoffs, buyouts and numerous "not
hiring" signs, there is one industry that continues to see the number of
consumers increase.

Across the state, the number of students in colleges and universities are growing.

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First the praise for the new state budget agreed to by the state Legislature and Gov. Jennifer
Granholm: It limits the growth of spending, and the parties mostly came to agreement in a timely
fashion and without the rancor that pushed last year's budget deliberations deep into the fall.

Credit an election year for motivating lawmakers to get most of the job done.

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What a turnaround from nine months ago.

When state lawmakers adjourned about 2 a.m. Saturday for a summer break, they had mostly followed through on their goal of passing a $44 billion spending plan three months ahead of the true budget deadline.

No government shutdown will occur this year mainly because the heavy lifting - raising taxes - was done last year.

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Lawmakers and Gov. Jennifer Granholm have reached agreement on a new budget that will result in about a $72 per-pupil average increase in the basic state K-12 grant to public school districts throughout Michigan.

The amount is not final under Wednesday's deal, but rather is a goal that will have to be finalized in
House-Senate conference committees that today will start putting the closing touches on
departmental budgets that make up the $44-billion state spending plan.

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Feeding 51,000 state prisoners every day is expensive. But it shouldn't be more expensive than necessary, so the Corrections Department should examine the findings of an audit that suggests savings from $10 million to $38 million could be possible.

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Local governments, public schools, colleges and universities will see increases under the tentative Fiscal
Year (FY) 2009 budget agreement reached today by administration and legislative officials, but not the
type of increases Gov. Jennifer GRANHOLM had packed into her proposal earlier this year.

State revenue sharing payments, originally slated to be bumped 4 percent under Granholm's plan, but
cut out of the Senate's spending plan completely, will be increased 2 percent, House Appropriations
Committee Chair George CUSHINGBERRY (D‐Detroit) told reporters today.

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When most people think of taxes, they see images of Capitol domes and remote bureaucracies.

When they think of public services, they have images of what local governments are expected to do every day: police the streets, put out fires, pave roads, maintain parks.
Revenue sharing is supposed to marry the state's taxation authority to local governments' service responsibilities.

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Michigan State University's Board of Trustees today approved a 6.8 percent tuition and fee increase for the coming year for in-state students, upping the price for an entering freshman taking 15 credits per semester to $10,214 annually.

"We've tried to take the long view," said MSU President Lou Anna Simon. "We've tried to worry
about the value of a Michigan State education, the value of Michigan State to our students, to the state and to our alumni scattered around the world."

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A Senate subcommittee has laid out a laundry list of problems with the Michigan Business Tax (MBT)
and surcharge, which would cost the state up to $1.7 billion in annual revenue to fix.

In a perfect world with a perfect budget, the MBT Impact Assessment Subcommittee would dump the
MBT surcharge. But since "fiscal constraints make that difficult," the panel recommends phasing out the
despised surcharge, which replaced the even‐more‐reviled service tax.

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The House passed today a Higher Education budget that mandates Wayne State University (WSU) study
whether having its medical school board members also serve on the clinical board is a conflict of
interest, but doesn't hinge future state funding on the result.

Today, on a 61‐45 mostly party‐line vote, the House passed SB 1099, a $ 1.8 million ($1.676 General Fund) Higher Education Budget for Fiscal Year (FY) '09. The budget represents a 2.7 percent increase over last year, which was less than the 3 percent increase recommended by Gov. Jennifer GRANHOLM.

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The Legislature's supposed to be in the stretch run on a 2009 budget to finance vital state services and advance critical policy improvements.

Work done on key accounts is less than encouraging. The 2009 budget is shaping up as another year in which the state spends far too much on prisons and not enough on higher education; a year in which struggling local governments are again left high and dry.

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Stardock Corp. is the kind of company Michigan could use more of.

It's a 21st century technology and entertainment company. It makes
computer games and software. It employs 55 people. Revenue this
year may reach $18 million.

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The Wall Street Journal in our featured guest editorial last week called the budget deal that saved our state from bankruptcy last fall "the Granholm tax dud" and asked if recession-weary residents have had enough. A better question might be, why would anyone take advice from an entity that has been one of the biggest boosters of President George W. Bush and virtually all of his policies, sanctions the outsourcing of American jobs, and opposes higher mileage standards for the automotive industry, which buys the Big Three time to build those monster SUVs no one wants anymore?

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The state's ongoing structural budget issues have an Eastern Michigan lawmaker suggesting it's about
time the state started taking a long, hard look at local revenue sharing.

"I find it interesting that after all the taxes we've raised, we still have a deficit," Sen. Jud GILBERT told
MIRS today. "To me that points to the fact that what we did actually did hurt the economy."

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Even for those who believe the media overplays negative news, it's been a rough week for Michigan.

Ford Motor Co. announced plans for involuntary layoffs of salaried workers. The automaker didn't disclose numbers, but some employees were told the cuts could hit more than 2,000 of Ford's roughly 23,000 salaried staff.

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Democrats failed to restore a $16 million revenue sharing increase today in the General Government
budget, which passed on a party‐line 21‐17 vote.

That was the biggest battle in the $1.6 billion budget (HB 5616), which includes funding for the Attorney
General, Civil Rights, Executive, Information Technology, Legislature, Auditor General, Management and
Budget, State and Treasury.

Appropriations Subcommittee Chair John PAPPAGEORGE (R‐Troy) said the budget should be viewed in
the context of the May Consensus Revenue Estimating Conference, which revealed a $393 million hole
in the Governor's proposed budget.

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Several mayors expressed their frustration today at the Senate's refusal to support the Governor's
proposed four percent revenue sharing increase, citing that this revenue is essential in funding core
social services like the police and fire department.

Kentwood Mayor Richard ROOT said that his city has not increased the size of its fire department for the
past few years, even though the city's population has increased.

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Lawmakers would have until July 1 to put together the coming fiscal year's budget under a proposed
Constitutional Amendment kicked around the House Appropriations Committee today, a move designed
to let school districts and municipalities know how much they can expect before they are months into their own fiscal years.

Schools and cities grumbled last year when Fiscal Year (FY) 2008 budget discussions carried on past
midnight Oct. 1, 2007, the official start of the FY '08 fiscal year. The protracted negotiations left entities
that operate on a July 1‐June 30 budget cycle in limbo.

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What does Michigan have to do to turn itself around? Bipartisanship, clear taxing and improved K‐16
education, to name a few, according to a new report released today.

The Center for Michigan, an Ann Arbor "think‐and‐do" tank, released its "Michigan's Defining Moment: A Common Ground Agenda for Michigan's Transformation," report today at a Lansing celebration
featuring political consultant Matthew DOWD, a Democrat who advised 2006 GOP gubernatorial
nominee Dick DeVOS.

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Here's a proposal not likely to win a popularity contest: With gasoline touching the $4-per-gallon mark, why not tack on another 30 to 50 cents or so to finally answer our responsibility to the national and state infrastructures?

We know -- it's crazy to think either state or federal lawmakers will vote to raise fuel taxes when motorists already threaten revolt over the 40 percent increase in pump prices during the past year.

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Lower tax revenues will force some trimming in the state budget being worked on for the next fiscal year, a trio of state economists said Friday.

The state likely is facing a shortfall of $170 million to $350 million in the budget year that starts Oct. 1. That could mean K-12 schools, universities and some state programs may not get as much as Gov. Jennifer Granholm has proposed.

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The fiscal analysts' projection this afternoon that the state faces a $393 million hole in next year's proposed budget didn't cause the panic of last year's $1.8 billion deficit, but will force lawmakers and the Governor to do more than roll out the wallpaper.

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A trio of state economists said Friday that lower tax revenues will force smaller increases in the budget being worked on for the next fiscal year.

State Treasurer Robert Kleine and the directors of the Senate and House Fiscal agencies said
during the May revenue estimating conference that there will be about $61 million less for the current budget than what they forecast when they held a similar conference in January.

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Fiscal experts say Michigan could have $434 million less than expected to spend on K-12 schools and other government services in the next budget year.

The financial trouble is here despite last year’s increases in the state’s personal income and business taxes to balance a budget deficit. Reasons include the national economic slowdown’s effect on Michigan’s economy and fewer people purchasing cigarettes and buying and selling homes.

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Despite predictions that Michigan's economy would begin to recover in 2009, fiscal experts now believe state revenues will be more than $400 million short of their forecast.

The state Treasury will take in $19 million less than initially forecast this year and $434 million less in
the fiscal year that starts Oct. 1 -- even after last year's increases in income and business taxes,
according to a report Tuesday by the House Fiscal Agency. That means lawmakers will have less to
spend as they debate next year's budget, but overall spending still will be about $50 million more than this year.

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Fiscal experts say Michigan could have $434 million less than expected to spend on K-12 schools and other government services in the next budget year.

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Preliminary numbers from the House Fiscal Agency (HFA) show the state looking in $434 million in new
revenue pitfalls for Fiscal Year (FY) 2009 since the last Consensus Revenue Estimating Conference (CREC) in January.

If the numbers up, it would more than erase the $125.5 million cushion Gov. Jennifer GRANHOLM had
built into her FY 2009 General Fund budget proposal and the $48.5 million surplus in the School Aid
Fund (SAF).

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Democratic and Republican lawmakers remain at odds over spending hundreds of millions of
dollars on university buildings, airport runways, trails, fishing piers and other state projects.

And time is running out to strike a deal.

The Michigan Department of Transportation says Thursday is the deadline to approve spending
to upgrade security and terminals, extend runways and make other improvements at more than
100 local and state airports. The construction season has started, and delaying major projects into the next budget year would result in higher costs due to inflation and potentially affect workers. That's because 60 percent of federal matching dollars for airports goes toward salaries
and wages, according to MDOT.

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The new state business tax that went into effect this year was intended to shift some of the tax burden from manufacturers onto service-oriented companies, such as real estate
agents and insurers.

But officials with those companies say the increases they may be forced to pay this year are unreasonable.

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The outcry from Michigan companies stunned and angry about their new tax bills has touched off a scramble in the state capital, where politicians are mindful about scaring away
business in an already floundering economy.

Responding to calls and e-mails from business owners complaining bitterly about their escalated
liability under the new Michigan Business Tax, which went on the books at the start of the year,
senators last week rushed to pass a $240 million tax relief bill.

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In the 6 1/2 years since the 9/11 attacks, Michigan communities have lost 1,800 police officers and 2,400 firefighters for lack of money to pay them. Wouldn't you think we'd be adding security?

The availability of "first responders" is a core quality-of-life issue, along with such things as schools, parks, libraries, snow removal and smooth streets, all of which have been affected by the state's financial woes.

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The Senate passed another change to the Michigan Business Tax (MBT) today without a Democratic
amendment tie‐barring the bill to a measure extending unemployment benefits.

The amendment that would have tie‐barred the bill to SB 0086 was defeated 19‐19, with freshman Sens. Roger KAHN (R‐Saginaw) and Randy RICHARDVILLE (R‐Monroe) voting with the Democrats.

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On Monday, the day before Tax Day, when many taxpayers across the land are irritated about having to
send the government their money, a group of Republican state representatives set out to fan that
resentment.

State representatives Jack Hoogendyk, R-Texas Township, and Rick Shaffer, R-Three Rivers, were in town to call for a repeal of the state income tax increase that the Legislature and governor approved late last year.

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Corrections officials say more than 12,500 of Michigan's 50,000-plus prison inmates -- 1 in 4 -- have
a history of mental illness.

Advocates call that shameful. Policymakers trying to get the $2 billion state corrections budget under
control call it expensive.

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Michigan's prison crunch will continue until at least 2010, because state policymakers have abandoned plans to revise sentencing policies and free old, sick and nonviolent convicts.

And in the meantime, the meter keeps ticking: It costs $5 million a day, or almost $2 billion a year,
to run the state prison system whose population stands at 50,200 and is projected to top 56,000 within five years.

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As the state spends more and more to operate Michigan's sprawling prison network, it has steadily
reduced investment in its colleges and universities. The result: Michigan is one of four states that spend more on corrections than on higher education.

Since 2001, lawmakers and the governor cut about $250 million in funding to the 15 public universities, prompting hefty tuition increases for students and their parents, and raising fears that higher education is being priced beyond the reach of those of modest means. The corrections budget is more than $400 million higher than in 2001.

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Michigan runs one of the nation's largest and most costly prison systems, a $2 billion-a-year
expense that is crowding out other spending priorities at a rate many officials fear the state can no
longer afford.

Yet despite near-unanimous agreement that Michigan can't pay ever-rising corrections bills during a
period of economic decline, politicians and law enforcement professionals remain hesitant to spend less by changing sentencing guidelines or paroling more prisoners.

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A day before residents face the deadline file their income tax returns, House Republicans held a press
conference announcing that they will introduce legislation to repeal last year's income tax rate increase.

Increasing the rate from 3.9 to 4.35 percent has cost the average Michigan family an additional $300 a year, money that could be spent on paying for a mortgage or fueling up a family car, GOP lawmakers argued
Monday. But instead, they said taxpayer dollars were going to fund things like revenue sharing dollars to
Detroit where the city settled a whistleblower lawsuit at a cost of nearly $9 million and a presidential primary that ended up being meaningless (as of this point, the state's delegates won't be seated at the Democratic convention and Republicans lost half of their delegates).

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Three House Republicans today sounded the call to repeal the income tax hike passed last year, but they spent the bulk of the press conference railing against government waste.

"Even if there's no repeal of the income tax," said Rep. Rick JONES (R‐Grand Ledge), "We need to change the wasteful way we spend money … If we don't change the way we waste money in Michigan, the only thing Michiganders will have left in their pocket is change."

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I am responding to "Higher gas tax plan fuels debate," (LSJ, March 3). In this story, the more specific issue of Michigan's gas tax was discussed: Should the Legislature raise Michigan's gas tax to help fund our road system?

I am quoted as supporting eliminating the gas tax and replacing it with a sales tax increase.

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Institutions of higher education that were left out of Governor Jennifer Granholm's capital outlay budget proposal argued their case for inclusion before the Joint Capital Outlay Subcommittee on Wednesday.

Under the governor's proposal, the state would contribute $315 million for $771 million worth of capital outlay projects at 10 of the state's 15 public universities in the current fiscal year and $105 million for $210 million worth of projects at 15 of the state's 28 community colleges.

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send him a Department of Corrections budget that did not include savings for policy changes that had not yet been implemented, carried through on his promise to fill a $23 million general fund hole with cuts to the central administration in a budget approved by his subcommittee Wednesday.

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A university budget that ditches Governor Jennifer Granholm's proposal to apply new criteria for allocating increased appropriations - with separate standards for the three major research institutions - was approved Wednesday by a Senate budget subcommittee.

Sen. Tony Stamas (R-Midland), chair of the Senate Appropriations Higher Education Subcommittee, said it is important to rebuild the base appropriations for all of the universities rather than embark on a new formula.

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The state announced Tuesday it plans to close a female prison located in suburban Detroit.

The Robert Scott Correctional Facility in Wayne County's Plymouth Township will close in May 2009. It has been open since 1991.

Michigan Department of Corrections officials said closing the prison will save $12 million in the next budget
year starting Oct. 1 and $36 million a year after that. The state corrections system costs $2 billion a year.

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Top analysts for the Legislature warn that revenue estimates built into next year's budget may have to be reduced by as much as a quarter of a billion dollars. That means that lawmakers and the governor should start now to cut back on spending proposals to avoid a last-minute scramble to balance the budget.

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The Michigan Infrastructure and Transportation Association has been telling anyone that would listen that Governor Jennifer Granholm's plan to add $150 million in state spending to fix roads isn't enough since the day she announced the proposal in late February. On Thursday, MITA reiterated that it would take at least $1 billion in additional funding in fiscal year 2008-09 just to scratch the surface of the state's transportation needs as officials spoke to the House Appropriations Transportation Subcommittee.

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The state's leading road building group this morning warned members of the House Appropriations Transportation Subcommittee that Michigan's leaders need to act now in order to avoid incurring ever-mounting road funding bills down the line.

"Our system is in dire straits," said Mike NYSTROM, vice president of government and public relations for the Michigan Infrastructure & Transportation Association (MITA). "We don't need to be experts to see how bad our system is."

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Pictorial display of the decline in law enforcement officers since 2001.

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Sen. Wayne KUIPERS (R-Holland) wants state university funding to be linked to enrollment as part of a new higher education funding proposal he rolled out today.

His plan puts all university money into one pool. Money from the pool would be distributed on a per-student basis, with the amount increasing each grade level. Funds for restricted federal programs, private university tuition grants and the Children of Veterans Tuition Grant Program would be exempted from the pool.

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Across the nation, the road to prosperity is being rebuilt. Increasingly, strong economies are emerging in cities where talented people -- creative, highly educated and entrepreneurial people -- are choosing to live and work.

A report issued Feb 12 by Michigan Future, Inc., an Ann Arbor think tank, demonstrates personal income is
higher in cities with high concentrations of people with college degrees. Where talented people are living, industries with high-wage jobs and regional economies are thriving, concludes the report, "Michigan's Transition to a Knowledge-Based Economy."

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Gov. Jennifer Granholm said Thursday she will propose more state money for public universities in her 2008-09 budget plan next week, and will insist that they hold tuition hikes within the inflation rate, even
if it means dipping into their private endowments.

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It's time to bust some myths about the state budget.

Myth: Personal income is falling in Michigan, so the state budget should fall, too.

Fact: Since 2001, Michigan personal income has increased by 19.3%. In that same time, the state's
spending from state taxes and fees has increased by just 10% -- even after last year's tax increases.

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David Boyd was visiting his 83-year-old mother at Martha T. Berry Medical Care Facility on Friday morning when the news hit.

The 217-bed facility may have to cut $700,000 from its budget, forcing 10 employee layoffs. Boyd worried about the impact on his mother, Sara Jane Boyd, who suffers
from dementia but has enjoyed a "good, decent quality of life" at the county-run facility for the past four years.

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Government doesn't run like a business because politicians run government, not business
executives. The business leaders of Metro Detroit don't want to run state government, but they would like to bring some common-sense business principles to the operations of the state.

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For most citizens, the prospect of studying up on the state's finances is daunting. Since the majority
of taxpayers are not accountants or math majors, being able to analyze data about the state's fiscal
status seems beyond reach.

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Universities and local governments are among those hoping to get more money in the next state budget.

Gov. Jennifer Granholm's 2008-09 fiscal year budget proposal will be presented in early February.

State lawmakers recently raised the income tax rate and tacked on a surcharge to a new business tax. Those changes are helping the state's finances, but money is still tight.

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Associations representing local governments, non-profit organizations, and the state’s public universities say policymakers in Michigan believe too many “myths“ about the state’s budget.

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The idea that state taxes and spending are out of control is a myth and an impediment to getting
Michigan's economy back on track, a group representing universities, cities and nonprofit agencies
said Thursday.

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Michigan’s personal income has increased nearly twice as fast as spending from state taxes and fees since 2000, a new analysis of Michigan’s budget shows, even after including the 2007 tax increases. And the state’s bite out of the average family’s paycheck today is about 15 percent less than in 2000.

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Particularly for Republicans and business groups in recent years, a rallying cry has been that state government is too large and growing too fast. But a group including local governments and universities argued in a report released Thursday that state government is growing more slowly now than it was under the prior administration, leaving it well within residents' means to cover its costs.

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Michigan's personal income has increased nearly twice as fast as spending from state taxes and fees since 2000, a new analysis of Michigan's budget shows, even after including the 2007 tax increases. And the state's bite out of the average family's paycheck today is about 15 percent less than in 2000.

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Aid to public schools will not be cut this year despite continuing state budget woes, Gov. Jennifer Granholm said today.

"For this year, we are not going to pro-rate K-12," the governor said during a late morning news
conference. "But all bets are off for next year."

More than $700 million in carryover cash from last year and the federal stimulus package to the states expected to win passage in Congress, possibly next month, may eliminate the need to make
any budget cuts for this year, Granholm added.

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Michigan experienced a seven-year high in murders in 2006 and a general upswing in the number of all crimes since 2004, Michigan State Police (MSP) officials announced today.

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Michigan residents were greeted with the good news last week that the state closed its financial books for the budget year that ended in September with surpluses totaling more than $350 million. But before the celebrating starts, it's worth noting that most of that money will
have disappeared by the end of the current budget year.

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The budget circus that came to Lansing a few months ago looks like it might not return in 2008. Officials have determined that state government finished its last
fiscal year Sept. 30 with $353 million more than expected.

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The state Department of Transportation's multi-billion dollar budget isn't enough to maintain the
state's roads at their current condition, and Sen. Jud Gilbert, R-Algonac, wants solutions.

Recently, Gov. Jennifer Granholm signed a bill Gilbert sponsored last year that will create a task force and citizen advisory committee charged with proposing alternative revenue sources to pay for the state's transportation needs.

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The financially beleaguered state actually ended the 2007 budget year with a surplus of more than $350 million, thanks to higher than expected tax receipts late in the year, lower than anticipated welfare rolls and spending restraints, the state budget office reported Wednesday.
The General Fund, the state's main operating budget, ended the fiscal year Sept. 30 with an extra $259.1 million and the separate School Aid Fund closed out with an excess of $94 million, according to the annual financial report.

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After last year's state budget battle, Livingston County's lawmakers want to make it a priority to get the
budget done quicker in 2008.

"Hopefully, we'll get the budget done early," said Rep. Joe Hune, R-Hamburg Township.

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Some widely despised Michigan business taxes were killed off in 2007.

But it remains to be seen whether the new Michigan Business Tax, which takes effect today, will be
any more welcomed than its predecessors.

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At the close of a tumultuous 2007, the outlook for Michigan government doesn't look much rosier for 2008.

The economy continues to drag, the state budget appears headed for another whopping deficit that will require more cuts -- but no gas tax increase, Gov. Jennifer Granholm said Tuesday. And the same partisan battles that contributed to this year's debacle likely will still
haunt the state in the New Year.

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No higher tax on gasoline, either.

Gov. Jennifer Granholm today expanded her no-new-tax promise to include the state gas tax.

"People are hurting. That’s a tax everyone feels in Michigan,” Granholm told reporters during a 45-
minute recap of 2007.

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Nearly as soon as they voted in October to create a 6 percent sales tax on certain services, many state
lawmakers realized they had made a mistake. The tax, part of a last-minute deal to balance the state's new budget, drew howls of protests and warnings that it would drive business out of the state.

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It was ugly.

Facing widespread pressure to repeal a tax on more services before it took effect first thing Saturday, the Legislature got the job done - barely.

But not before the tax became law, although lawmakers said businesses could ignore it.

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People who paid a 6 percent tax on services before the tax was repealed would get a refund under legislation headed to Gov. Jennifer Granholm.

The Michigan Senate approved the bill Tuesday, three days after the tax briefly took effect. It was in effect for
less than 24 hours.

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Now that the service tax is dead and buried and a new $600 million surcharge on business goes on the books next month, who are the big winners and losers under
Michigan's new business tax scheme?

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Michigan businesses and consumers were spared an onerous sales tax on certain services
by a last-minute compromise by legislative leaders. Last-minute deals have become the norm
in Lansing, and have proven themselves less than the ideal way to make policy.

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State lawmakers are nothing if not consistent. They have an unfailing ability to march up to a deadline and keep walking.

Though there's still time today to repeal the services tax, House Democrats -- with the express endorsement of Gov. Jennifer Granholm -- on Thursday submitted an unreasonable plan to the Senate and said "take it or leave it."

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Dozens of abused and neglected children taken into protective custody in Wayne County have slept overnight in a state office building because of a shortage of foster homes, the Free Press has learned.

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The state Capitol was a beehive of inaction Thursday as top lawmakers, business interests and Gov. Jennifer Granholm worked to find a replacement for Michigan's widely despised new service tax before it is to take effect at midnight tonight.

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So will it stick or won't it?

The new 6% service tax is like one of those bad snowstorms that everybody hoped would skip town. Even the forecasters warned that this thing couldn't last long. This oddly crafted tax on services --6% on nails but not hair; 6% on ski lift tickets but not golf -- is so dopey that most expected it ultimately had to be repealed.

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This evening Gov. Jennifer GRANHOLM signed HB 5408, legislation that repeals the service tax and replaces it with a surcharge on the Michigan Business Tax (MBT).

The service tax, which went into effect at 12:01 a.m. Saturday morning, had a short life span of about 19 hours. Granholm also signed SB 0845, legislation that holds businesses harmless for the brief period that the tax was in effect.

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For a month, Robin BARKER lived in pain because of a tooth that needed to be pulled. As a Medicaid recipient, Barker had no other choice.

"I called and it took a month just to get in. If I wanted surgery it would have taken until Jan. 9," the 42-year-old Ann Arbor woman said. "When you're in pain, you're in pain."

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A new use tax on services that Michigan business uniformly dreads is moving closer to taking effect Saturday after lawmakers failed to reach agreement on a replacement.

In a move denounced by Senate Republicans, House Democrats on Wednesday night jammed through a service tax repeal and promptly adjourned until Tuesday.

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Cross-country skiers can visit all of the same state trails they did last year, but 16 of them will not be groomed or have plowed parking areas, the Department of Natural Resources announced Thursday, cutting the 242 miles of trail available last year to 106 miles. The department is also not entering any volunteer grooming agreements for new trails this winter.

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Negotiations broke down between the House and Senate over the widely despised service tax late Wednesday, boosting chances the unpopular levy will go into effect on Saturday.

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House Democrats passed its version of a service tax repeal and replacement bill (HB 5408) and headed out of town this evening, basically telling the GOP-controlled Senate that if it wants the tax repealed it will be on the House's terms.

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Industry and government transportation leaders are warning that a dramatic drop in Michigan
road funding next year will result in steadily deteriorating highways and the loss of thousands of construction jobs in Michigan.

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What will happen if the state's environmental cleanup funds run out?

Will contaminated brownfield properties -- like the abandoned Performance Paper site near the Edison neighborhood -- not be cleaned up?

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Less than one month ago, the state Legislature came together to pass a budget plan, made up of cuts, reforms and revenues, that made a promise to the people of Michigan. We promised that our schools would get the funding they need to prepare our children for the good-paying jobs of the 21st century; health care for our seniors and services for our veterans would remain strong; and police and firefighters would stay on the job protecting our communities.

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As soon as the Legislature puts the finishing touches this week on the
replacement for the 6 percent service tax, all the pieces will be in place and the state budget
should be squared away for years to come, right?

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The Senate today will interrupt its two-week November recess to work on a compromise to repeal a new tax on services and replace it with a bigger business tax.

But a final deal with the House must wait until at least next week, when the House returns from a traditional hunting-season break.

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The Senate is expected today to pass its own version of a business tax surcharge to replace the universally despised service tax -- but it won't win final approval today because the House isn't scheduled in until next week.

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The Lansing area would lose $4 million for education, mostly in grants, if President Bush's priorities ultimately triumph in a budget battle over a domestic spending bill.

But U.S. Rep. Mike Rogers, R-Brighton, said his congressional district could receive more money next year if Democrats and Republicans compromise on funding levels for the departments of Education, Labor and Health and Human Services.

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The only reform measure to come out of Michigan's miserably protracted budget fight is in danger of being gutted by House Democrats who are making one last stand on behalf of the state's biggest teacher union.

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After studying implementation costs of the new state sales tax on services, the Detroit Regional Chamber reports that the start-up tab for businesses to comply with the law will be $906 million. The tax itself is only intended to raise roughly $600 million.

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The head of the House Fiscal Agency (HFA) said he believes that the free-market advocates at the Mackinac Center for Public Policy were a disservice to the public during the budget process this year.

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A plan to kill Michigan's universally hated service tax and replace it with a surcharge on the state's new business levy won House approval late Thursday night.

The Democrat-controlled House voted 58-48 in favor of the bill, mostly along party lines, that tacks a 33 percent tax onto the gross sales of medium and large businesses across the state but scraps a previously passed measure to expand the 6 percent state sales tax to a mixed bag of services.

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Today, House Minority Leader Craig DeROCHE (R-Novi) told MIRS his caucus is discussing possible legal action over the manner by which House Democrats gave HB 5408 (the services tax repeal and replacement bill) immediate effect (I.E.) Thursday night.

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Michigan lawmakers' recent approval of a 6 percent tax on services was part of a last-minute solution to the state's desperate budget problems. And as with most acts of desperation, it was not well
thought out and quickly regretted.

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A bad economy and tax fatigue are likely behind the defeat of a number of local tax issues in Metro Detroit. When voters turn down money for a local fire department and school improvements, something is up.

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It's almost certain the Legislature will soon kill the new sales tax on services before it takes effect next month.

This isn't certain: How much of it will be replaced?

The state Senate voted Wednesday for repeal. The House tax committee plans to do likewise today, and
recommend replacing the lost revenue with a surcharge on the new Michigan Business Tax (MBT),
which takes effect Jan. 1.

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This evening, on a virtual party-line 58-48 vote, the House passed HB 5408, legislation that would repeal the services tax adopted a few weeks ago and replace it with a surcharge on the Michigan Business Tax (MBT).

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Lawmakers and business groups are nearing agreement on the repeal of a much-maligned use tax on services.

The deal would replace the revenue loss with a surcharge on the new Michigan Business Tax that takes effect Jan. 1.

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A storm is brewing over the state sales tax on services that Michigan lawmakers passed in the wee hours last month.

Because lawmakers don't have time to deal with it now, the state Senate last week voted to push back by three weeks the date the tax goes into effect.

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Instead of paying the maligned services tax, businesses would instead tack a surcharge onto their Michigan Business Tax liability under legislation that passed contentiously late Thursday. But House Speaker Andy Dillon (D-Redford Twp.) said after the vote he's leaving the door open to possible changes in the bill headed up by a proposal Rep. Brian Calley (R-Portland) is working on dealing with adjusting the gross receipts and business income rates in the MBT.

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For many years the Legislature has taken two weeks off during deer hunting season -- a custom that's
controversial this year because of pressure to repeal and replace the new sales tax on services before it
takes effect Dec. 1.

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The Senate Finance Committee approved a bill repealing the new 6 percent services tax Tuesday, continuing an effort by opponents to block implementation of the
controversial new tax before it even goes into effect on Dec. 1.

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The ill-conceived state services sales tax needs to be repealed and replaced with a special surcharge on the Michigan business tax that will end in 2011 -- along with serious reforms in state government spending.

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As expected, the Michigan Senate voted 23-15 Wednesday to repeal a much-maligned tax on services such as business consulting, tanning and graphic design before it takes effect Dec. 1.

The full House could follow up as early as Thursday with a plan replacing the $614 million the tax would generate this fiscal year.

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With the clock ticking towards imposition of a new use tax on services on Dec. 1, the Senate Finance Committee this afternoon moved legislation to repeal the levy without replacing the $750 million a year ($613 million in Fiscal Year 2008) in lost revenues.

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The House Tax Policy Committee today took testimony from business groups on the use tax expansion to services the Legislature passed and Gov. Jennifer GRANHOLM signed into law five weeks ago as part of the package to avoid a prolonged state government shutdown.

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As Michiganians wonder if they will be paying a new service tax beginning Dec. 1 and school districts struggle to pay bills because state funds are late, state legislators are readying for an important annual event.

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Pragmatic business leaders are offering Lansing a way to dump a crazy new state services tax while retaining
essential revenue. Lawmakers of both parties should jump at this deal.

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The service tax created by state lawmakers as part of this year's budget deal does a decided dis-service to Michigan.

The tax is arbitrary, anti-growth and creates an ungainly new accounting structure businesses would have to pay through the nose to implement -- just the kind of lousy policy you'd expect from the slapdash, ham-handed process lawmakers used to create it.

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An unexpected gift arrived at the state Capitol last week as major business groups offered to accept a
temporary rate hike in the new Michigan Business Tax if Gov. Jennifer Granholm and the Legislature will drop their ill-conceived services tax and go back to the drawing board on revenue.

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Leave it to Paul Hillegonds to find a silver lining in the state budget debacle. Being a grumpy old cynic, all I can see in the colossal debacle Lansing made of the spending blueprint is bad news for Michigan's future.

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To public relations executive Barbara Lezotte, Michigan's new tax on services is a punch in the gut.

Her small Lansing consulting company, Lezotte Miller, has had to retrench during Michigan's
prolonged economic downturn, cutting jobs and health care benefits. She recently added employees to bring her staff up to five people, for the first time since 2001.

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The Senate fired off the first of what may be several attempts to scratch the wildly unpopular use tax expansion on services today by passing legislation that would postpone the tax's start date 20 days from Dec. 1 to Dec. 20.

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Gov. Jennifer Granholm on Wednesday said she would not veto around $56 million in need-based grants for students attending Michigan private colleges, rounding out a budget deal with the Legislature that ended earlier in the day.

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The state budget approved early Wednesday brought a not-quite-happy end to months of negotiations and mutual recriminations between Democratic and Republican leaders.

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Nine months of shirking responsibility and playing the most vile brand of politics -- and 30 days past due -- and Michigan's elected leadership has at last delivered a balanced budget. The deal keeps the state staggering ahead, but it doesn't substantially change its course. Nor does it put an end to its chronic deficits. Like each of the past seven budgets, the one for 2007-08 will achieve balance through one-time fixes and by pushing ahead today's financial problems to tomorrow.

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MEDICAID
The money: $8.5-billion budget is up $373 million. Of that total, $2 billion comes from state tax dollars, the rest from federal government.

The impact: Keeps coverage for eligible 19- and 20-year-olds, as well as nonparental child caretakers,
such as grandparents.

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Gov. Jennifer Granholm and 148 lawmakers ended nine months of haggling over the state's budget crisis by essentially agreeing to preserve the status quo.

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A new state budget was approved by the Legislature early Wednesday morning, ending nine months of wrangling between lawmakers and Gov. Jennifer Granholm that produced a large tax increase, a brief government shutdown, raw nerves and some steps to rein in mushrooming costs to taxpayers.

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While the $43 billion 2007-08 state budget does not become law until Gov. Jennifer Granholm signs each of the 17 budget bills, she and state lawmakers have agreed to major pieces of the spending plan.

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After controversial tax hikes, some difficult spending reductions, occasionally nasty negotiations and even a four-hour government shutdown, Michigan closed in late Tuesday on a balanced state budget.

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Michigan's fragile state budget agreement was reached in the middle of the night after months of sometimes painful give-and-take between lawmakers and Gov. Jennifer Granholm.

Shortly after the sun came up Wednesday, it was clear the negotiations and the pain aren't over.

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Legislators today were expected to complete a drawn-out, nine-month struggle to balance the state's budget for the 2008 fiscal year.

The House approved budgets Monday night for most state departments on a largely bipartisan basis.

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Universities and community colleges will receive a 1 percent increase in state aid for operations as Michigan legislators complete what has been a drawn-out, nine-month struggle to balance the state's budget for fiscal 2008.

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State Rep. Dan Acciavatti, R-Chesterfield Township, is anxiously awaiting passage of the state budget so he can start the process of repealing its most controversial plan - the expansion of the state's sales tax.

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With little time left, lawmakers and Gov. Jennifer Granholm were still divided Monday over whether more private providers should handle adoption, foster care and juvenile justice services — the big sticking point in resolving the state budget.

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By now, there can't possibly remain any doubt that the new sales tax on services is a disastrous policy that will drive businesses and jobs out of Michigan and keep others from coming here. The only question that remains is how to fix it.

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If Gov. Jennifer Granholm vetoes money for private college tuition aid, as threatened, she'll be overridden by the Legislature, a top legislative Democrat said Friday.

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The Legislature's decision to extend the state sales tax to dozens of services has roiled Michigan politics and thrown the state's business community into a state of anger and confusion. It also has sparked -- after the fact, unfortunately -- a debate on how the state should assess taxes. And as that debate continues, there's growing sentiment that taxing services isn't the way to go in Michigan.

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The leading House Democrat on the state budget warned Gov. Jennifer Granholm not to try to eliminate $57 million in state grants for private college students to balance the budget, an issue he said is blocking a final agreement.

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Thirteen months is more than enough time for Gov. Jennifer Granholm and the Legislature to come to agreement on balancing the state budget. Any talk of extending budget deliberations for yet another month -- or possibly three -- should be shut down before entering this final weekend of negotiations.

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State government edged closer to a second fiscal crisis Wednesday as leaders huddled to try to hash out $433 million in budget cuts and lawmakers postponed meetings to finalize two departmental budgets.

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Good economic times come and go. The economy waxes and wanes. It grows hot but eventually cools. Then the cycle repeats. Hot. Cold. Again and again. Over and over.

The state of Michigan's revenue correlates with Michigan's economy. When the economy is strong, revenue is high. When the economy is weak, revenue dips.

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Legislative leaders and administration officials said Tuesday they can reach a final budget deal without a government shutdown or 30-day extension of the temporary budget now in effect.

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Putting a limit on how long someone can serve in the state Legislature has led to greater opportunities for people to get involved in state government, particularly for women and minorities, some believe.

But others say it has led to inexperienced people making critical decisions on the direction the state is headed, and it has been blamed in part for the recent budget debacle in Lansing.

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Since the 11th-hour agreement on raising taxes to make Michigan's 2008 budget balance, the capital city has been alive with activity.

A coalition of business groups, led by the state Chamber of Commerce, has launched a drive to repeal the sales tax on services included in the deal.

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The Legislature has run out of tricks and now it's running out of time - again.

The Halloween deadline for the 30-day budget extension is nine days away, but the partisan bickering that pushed the government into a five-hour shutdown on Oct. 1 is rearing its ugly head.

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Roughly a half-dozen key areas of disagreement remain among lawmakers trying to balance the state's budget before next week's deadline to avoid another potential partial government shutdown.

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With efforts to repeal the state's new service tax ramping up in the Capitol, changes to another tax paid by business — the new Michigan Business Tax — are being eyed for replacement revenue.

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The Legislature has run out of tricks and now it’s running out of time — again.

The Halloween deadline for the 30-day budget extension is nine days away, but the partisan bickering that pushed the government into a five-hour shutdown on Oct. 1 is rearing its ugly head.

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The ink on two new tax increases was barely dry this month when a lot of influential Michiganders went wobbly on what was done.

Business groups want state lawmakers to repeal the 6 percent sales tax that was extended to some services.

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Gov. Jennifer Granholm and state lawmakers are acting as if they have some choice other than to balance the state budget before the Oct. 31 deadline by cutting $450 million in spending. They don't.

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Thirty-seven bridges in southwestern Michigan are structurally deficient.

Another 35 area bridges are functionally obsolete. How many of them do you drive over in a given day?

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Where in the world did state lawmakers come up with the list of services that will be subject to Michigan's 6 percent sales tax?

Did they put every type of service known to mankind on a big board and throw darts at them until they reached a certain number?

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Businessman David Rhoa offers a blunt assessment of the confusion surrounding Michigan's expanded tax on business services.

"The Legislature and governor pulled a pin on a grenade and handed it to small businesses and said, 'Hold onto this for a second,'" says Rhoa, 39, whose family owned firm in Kalamazoo, Lake Michigan Mailers, employs 56 workers. "Now we're left to deal with it."

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Five chambers of commerce and 34 other business organizations are in a coalition trying to repeal Michigan's new sales tax on services.

The Midland Area Chamber of Commerce's board of directors on Tuesday "might very well discuss" whether to join that Ax the Tax Coalition, chamber President Sid Allen said Friday.

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Less than two weeks left before government could shut down again.

Michigan lawmakers don't seem in any big hurry to finish resolving the state's budget. After opting for more taxes to resolve $1.35 billion's worth of the $1.75 billion deficit, they still have to settle the remaining $433 million deficit.

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State lawmakers have struggled with the budget for a number of months. Having to address a $1.75 billion deficit is no easy task. After years of dreaming up one-time solutions, and accounting Band-Aids and gimmicks to solve our state budget challenges, hoping that we could grow out of our economic woes over time, we've now turned to a solution of taxing our way out of the problem.

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Only 12 days away from the next government shutdown deadline, the public partisan sniping on budget cut talks ramped up Thursday, indicating a final accord is nowhere in sight.

Senate Majority Leader Mike Bishop, R-Rochester, fired off a statement late Thursday afternoon saying Gov. Jennifer Granholm and House Democrats appear to be reneging on an agreement to cut spending in Human Services, Community Health and other areas.

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Widespread opposition to the new sales tax on services has some Michigan lawmakers who voted for it
hoping they can get a do-over, and raising the unlikely possibility the tax could be repealed before it
goes into effect Dec. 1.

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Lawmakers have made no visible progress on hammering out $440 million in budget-balancing cuts as the state is closing in on another shutdown deadline -- this one on Halloween.

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Representative democracy presupposes that voters elect legislators not only to represent the interests of constituents, but to exercise their own judgment as well. We entrust our representatives to deal with complex issues and to strike a balance when the interests of constituents (say, lower taxes and good schools) compete or are in conflict with each other. If we tie legislators' hands by mandating that they always vote a certain way on a certain issue, regardless of the circumstances, we leave them unable to govern.

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Recall petitions were filed in Muskegon and Detroit today against three more state lawmakers, bringing to six the number of legislators facing potential job loss for voting to raise taxes.

The latest targets are state Reps. Ed Gaffney, R-Grosse Pointe Farms, and Mary Valentine, D-Muskegon and state Sen. Gerald Van Woerkom, Muskegon, said Leon Drolet, director of the anti-tax group Michigan Taxpayers Alliance.

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"Can't anybody here play this game?''

With apologies to Casey Stengel and the 1962 New York Mets, we borrow that quote in reference to the folks who are running state government.

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Now that everyone has had time to digest the package of tax increases, reforms and further cuts to the state budget enacted in the wee hours by the Michigan Legislature, just about everybody has something to be upset about.

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Local business owners are among those rallying behind Republican efforts to repeal Michigan's new service tax.

Rep. Dan Acciavatti, R-Chesterfield Township, introduced a bill to repeal the service tax Tuesday.

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A presentation by the Citizens Research Council of Michigan.

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Ten state lawmakers who voted to raise taxes may be fighting for their jobs.

Anti-tax activists on Thursday named five Democrats and five Republicans in the 148-member Legislature as recall targets. Paperwork was quickly filed against one legislator - Rep. Steve Bieda, D-Warren - with more to come against nine others Friday and early next week.

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Now that everyone has had time to digest the package of tax increases, reforms and further cuts to the state budget enacted in the wee hours by the Michigan Legislature, just about everybody has something to be upset about.

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Dozens of Michigan businesses planned to huddle in private today to map out a two-front attack against the expansion of the state sales tax to services approved last week by the Legislature to help balance the state budget.

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House Speaker Andy Dillon, D-Redford Township, wants the voters to do what he and his fellow lawmakers couldn't -- come up with sensible tax policy that doesn't hurt Michigan's competitiveness. While voters may end up having to fix the mess Lansing made, Dillon's proposal still misses the mark.

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Michigan Education Association President Iris Salters provided taxpayers with an excellent example of
hyperbole recently when she rapped state lawmakers for the way they balanced the budget.

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In criticizing the way Republican Highway Commissioner Charlie Ziegler built unconnected four-lane stretches a half-century or so ago, Democratic Gov. G. Mennen Williams said it was like determining locations by firing a shotgun at a map of Michigan.

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The budget crisis at the state Capitol, resolved in the wee hours of Oct. 1 after a partial government shutdown, presented Michigan with a historic opportunity to redefine itself and set a more promising course for the future, according to Senate Majority Leader Mike Bishop, R-Rochester.

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By the time this column sees print most people will already be aware of the 2008 budget resolution. Roughly $1.4 billion will be raised in new taxes, with $440 million scheduled to be made in cuts. Government did technically shutdown, from midnight until 4 a.m., but the vast majority of Monday's state services were kept operational. Almost all employees reported to work as normal.

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Compromise has become an ugly word in today's political arena.

In this era of the permanent campaign and instant punditry, there is little benefit for politicians to find common ground. Perhaps former U.S. Sen. Jesse Helms was right when he said that the middle of the road was the surest place to get run over.

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The public doesn't like shutdowns.

The most memorable example of a failed shutdown occurred in late 1995 and early 1996 at the federal level. Principal players were President Clinton and then-House Speaker Newt Gingrich.

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Halloween is just around the corner. And if Gov. Jennifer Granholm and the Legislature expect to be free for trick-or-treating, they had better buckle back down in the days ahead and finish work on a real state budget. Despite the political histrionics of last weekend leading to a tax increase package, the job is far from done.

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Forget the spin: This week's budget deal has Michigan business steamed.

Detroit's automakers in August together acquiesced to Gov. Jennifer Granholm and killed a push by Detroit Renaissance to advance a structural reform agenda. The reward for their loyalty is the privilege of paying tens of millions in new taxes and losing hundreds of millions in potential refunds.

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There are many problems with the service tax hastily enacted by lawmakers last weekend. Its primary redeeming merit is that it prevented a humiliating government shutdown.

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Starting Dec. 1, lift tickets at Michigan ski resorts will be taxed 6%.

Fees to play golf or to bowl won't.

Personal fitness training will be taxed, too. Fitness centers won't.

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Gov. Jennifer Granholm defended this week’s budget deal to a group of policy makers from across the state, but acknowledged that more work remains.

“I understand there is a lot of anger out there about taxes. It emanates from angry over the economy overall,” Granholm said at the annual meeting of the Citizens Research Council, an influential policy group. “Tough calls had to be made.”

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The sales tax on certain services that was adopted as part of the state budget deal early Monday morning is one of the most unfair and foolishly crafted pieces of legislation ever to come out of Lansing.

By now, the arbitrary nature of the tax has been well publicized. Lawn mowing won't be taxed, but flower planting will. Haircuts won't be taxed, but bikini waxes will. Accounting services won't be taxed, but consulting contracts will. And so on.

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Al Cavasin is not certain why politicians in Lansing decided at the eleventh hour to tax his business to help solve the state budget crisis, but the fallout is clear.

``It's going to kill us. There will be jobs lost and revenue lost,'' he said. ``I'm sure we're going to lose business.''

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The state budget deal was an ugly solution to an ugly problem -- a $1.75 billion shortfall that followed successive years of shortfalls. The compromise rested heavily on tax increases, and not heavily enough on changing the costs of governing. Reducing those expenses must be a continuing task for lawmakers. So should separating essential from nonessential spending, and diminishing the latter.

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Welcome to the banana republic of Michigan.

Where scoring political points outranks good governance. Where leadership means braying about your own beliefs while thumbing your nose at compromise. And where last night in televised speeches, state leaders continued to point fingers at one another -- risking, for the first time in the state's history, a halt in the machinery of state government.

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Michigan public universities, already stretched thin after losing a huge monthly payment from the state this summer, may be on the brink of missing another if the government shuts down on Monday.

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Gov. Jennifer Granholm has ordered her Cabinet to implement a partial state government shutdown at midnight Sunday, while leaving the door open for a budget deal to resolve a $1.75 billion deficit.

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Step up, lawmakers. Step up, governor. Step up, Democrats and Republicans. You have an important job to do today, and there's no good choice except that you step up and get it done.

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Public pressure and private meetings are heating up at the Capitol as state lawmakers and Gov. Jennifer Granholm race to avoid a partial government shutdown.

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Lawmakers and Gov. Jennifer Granholm continued into early Friday to try to reach a deal that would avoid a partial state government shutdown next week, reporting enough progress that they could get some sleep.

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Those lobbying for Michigan's budget crisis to be solved almost entirely with higher taxes make the argument that the state's fiscal problems have their roots in the income tax cuts put in place by former Gov. John Engler.

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There are four ways to balance Michigan's budget for the upcoming fiscal year: Reduce expenditures; increase revenues; use one-time gimmicks, such as changing the timing of property-tax collections; and sell off assets.

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Facing growing criticism for not disclosing the state's shutdown plans, Gov. Jennifer Granholm maintained Wednesday that essential state services will continue Monday even if state leaders can't reach a budget deal.

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Gov. John Engler had a reputation for playing legislators, especially newcomers among his fellow Republicans, like a virtuoso picking up his violin. He had served two decades as a lawmaker himself, giving him a combination of experience, savvy and political heft that will never again be matched in this term-limited state.

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After another week of watching the same endless shenanigans going on in Lansing, I can only repeat the start of my column last week: "Michigan's political, policy and finance systems are broken. Ten million Michigan citizens have been held hostage to the partisan agendas of both political parties and their members who now hold office, not to mention the interest groups that fund their campaigns."

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Lawmakers and Gov. Jennifer Granholm said Thursday night they were still working on a deal to avoid a partial government shutdown next week, but the specter of a shutdown still hovered over the talks.

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As Michigan nears a shutdown of state government, officials must begin telling residents exactly what such a closing will look like and how they will manage this dangerous and unnecessary crisis.

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State government was preparing for a possible partial shutdown that could start next week even as negotiations to avoid a stoppage continued Wednesday at the Capitol.

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With five days left in the race to approve a state budget, a partial government shutdown is looking like a real possibility.

Despite months of back-and-forth discussions, the Democratic-led House and Republican-led Senate still have not reached a consensus on how to bridge the looming $1.75 billion deficit in the upcoming fiscal year, which begins Monday.

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State agencies prepared for a shutdown of state government as Gov. Jennifer Granholm and legislative leaders worked into the night Tuesday to break a long-standing stalemate over budget cuts and tax increases.

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Michigan is losing population. Home prices are imploding. Income per Michigan resident is already 7 percent below the national average. The private-sector tax base is collapsing.

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Michigan lawmakers are working frantically to find a solution to the state's projected $1.75 billion budget deficit.

While most legislators agree the final solution will have to contain a mix of spending reforms and tax increases, it's the careful balance of those two components that have separated senators and representatives, mostly down party lines.

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Secretary of State Terri Lynn Land on Tuesday told state residents they may want to renew their driver's licenses and plate tabs before Monday, just in case there's a government shutdown.

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As we hurtle toward a shutdown of state government it has become painfully clear that the debate is being directed by the most extreme elements of both political parties. Republicans with more moderate views -- including a desire to compromise -- are being held hostage by the threat of recall.

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Squeezed by the calendar and clock, state lawmakers will try tomorrow to meet an unofficial midnight deadline for a new budget agreement that would prevent a government shutdown Monday.

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Three senators were named this evening to a joint House-Senate panel on a possible income tax increase, meaning key negotiations to resolve the state's budget deficit can begin as soon as Wednesday morning.

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The Senate's Republican leader called on Gov. Jennifer Granholm to approve a 30-day extension of this year's budget, without a tax increase, to avoid an Oct. 1 partial shutdown of state government in the new fiscal year.

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Higher education is a vital building block in reconstructing Michigan's economy so that the people of this state are able to lead in growing fields such as technology, health care and the sciences.

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The Democratic House and Republican Senate moved closer in an extraordinary Sunday session to a deal for an income tax increase, but remained far apart on how much state government should be cut to erase a $1.75-billion deficit.

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Michigan's budget pressure intensified even as the House late Sunday night sent an income tax increase bill to a House-Senate committee to work out a deal.

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Senate Majority Leader Mike Bishop said Saturday morning that his chamber has no interest in voting for higher taxes when it returns for an unprecedented Sunday night session to wrestle with a $1.75 billion budget mess with little time left to come up with a solution.

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It's time for an end to the finger-pointing and press conferences so state lawmakers can do the jobs they were elected to do - make decisions that will solve Michigan's budget crisis and avert an Oct. 1 partial shutdown of state government.

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If the Legislature can't get its act together and pass a budget that combines budget cuts, a tax increase and significant reforms by Oct. 1, everyone in Michigan will be hurt. That's because the state government would shut down.

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Even as Michigan's top three research universities lobby for a bigger piece of the state budget pie, state Rep. Jack Hoogendyk is urging a push in the other direction.

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With eight days left to either finish a new state budget or shut down most of state government, the House and Senate convened in a rare Sunday session to attempt once again to solve a $1.75-billion deficit with a tax increase and spending cuts.

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The divide in the Michigan Legislature isn't only between Republicans and Democrats; it's between practical leaders and political hacks - and the latter appear to be running the show.

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The House may not be able to pass a tax hike, but late tonight it proved it is capable of maneuvering a potential tax hike bill into a conference committee.

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The Senate passed $900 million in cuts to next year's budget tonight, including the $363 million set aside for a 2.5 percent increase to education (SB 0511). A Senate Fiscal Agency analysis estimated the various cuts to state government could lead to hundreds of state employee layoffs and still leave a $600 million hole to be filled, presumably with a tax increase.

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The state House and Senate and Gov. Jennifer Granholm all need to take a cue from leaders as diverse as former Govs. William Milliken, John Engler and James Blanchard as they try again Sunday to roll the big rock of a tax increase up a steep hill, veterans of Lansing's political wars said Friday.

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House Democrats could not round up the necessary votes for tax hikes to erase most of the state's red ink, so on Sunday Senate Republicans will try to get the job done with mostly budget cuts.

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With Michigan careening toward an official governmental shutdown, a fitting capstone to its dysfunction and denial, a few questions beg to be asked of Lansing -- even if the governor and the Legislature aren't likely to answer them.

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It's nothing short of ridiculous that legislators -- including the Grand Rapids representative off hunting for bear in Russia -- have delayed resolution of Michigan's budget crisis until the 11th hour.

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Here are some more examples of how a state government shutdown would -- and wouldn't -- affect the lives of Michiganians.

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House Democrats hoping to pass a mix of tax increases and government reforms Thursday made little progress toward patching up the state's $1.75 billion deficit.

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The Democrat-led state House continues to get tangled up in tax debates as it tries to resolve a projected budget crisis for the fiscal year that starts Oct. 1.

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The latest effort by state House Democratic leaders to increase the state income tax as part of a bipartisan plan to solve Michigan's $1.75-billion deficit dragged into this morning, 12 hours after the House began its session Thursday night.

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The votes of lawmakers like state Rep. Tom Pearce, R-Rockford, and Robert Dean, D-Grand Rapids, could be critical to the budget deal-making under way behind closed doors in Lansing.

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State senators approved a continuation budget on Monday, but Gov. Jennifer Granholm said Tuesday she will accept a partial government shutdown before she'll approve a budget without a revenue increase.

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Sen. Mike Bishop is taking a courageous stand for a Republican legislative leader in rallying his caucus to support a compromise budget solution that combines spending reforms with tax hikes. He shouldn't have his political career threatened for doing the right thing.

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So far in the budget brinkmanship, most of the pressure has been on legislative Republicans to accept the reality that Michigan taxpayers will have to pay more taxes next year to keep the state afloat.

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So far, state Rep. Dick Ball has been voting no on taxes, and Rep. Barb Byrum hasn't been voting at all.

But the two mid-Michigan lawmakers hold votes that could be pivotal to efforts to raise the state income tax.

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Lawmakers inched closer late Tuesday to a deal to raise taxes to solve the state's looming budget crisis.

Senate Republican leaders publicly signaled Tuesday night that they were willing to raise the state income tax -- from 3.9% to 4.3% -- and make cuts of about $1 billion.

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The state's top Democratic lawmaker said late Tuesday the Legislature is "very close" to an agreement to wipe out the $1.75 billion budget deficit, and predicted final passage could come by the end of the week.

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Michigan House of Representatives Democrats should develop a backbone and vote to increase the state income tax temporarily, even if not one Republican goes along.

We can understand Democrats' desire for any tax increase to have bipartisan support. Democrats representing swing districts are especially nervous about voting for a tax without the cover of bipartisan votes.

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Senate Republicans are considering a major tax increase to help resolve the state's fiscal crisis -- a potential thaw in icy negotiations with Gov. Jennifer Granholm, who vowed Monday to veto a bill allowing the state to continue spending at its current pace past Oct. 1.

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The Republican-controlled Michigan Senate approved a temporary budget extension Monday that would allow government to continue to function if a budget solution isn't reached by Oct. 1.

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An agreement to avoid a state budget crisis likely will include both an income tax increase and a 6% sales tax on some services, House Speaker Andy Dillon, D-Redford, said early this morning.

But the service tax won’t extend to entertainment, such as tickets to sporting events and concerts, he
said.

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The Michigan Senate will get its chance today to try to resolve a $1.75 billion state budget mess that threatens a partial government shutdown in just two weeks.

Senate Majority Leader Mike Bishop, R-Rochester, will present his caucus with a plan that would deal
with the entire shortfall through budget cuts.

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Our state is at a crossroads. Many here have seen their personal economic hopes bent as our state adapts to the changing global economy. As a result, our state's fiscal fortunes have suffered.

We have been in a financial downturn - a state fighting recession. Bad enough.

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State lawmakers took a step Monday toward avoiding a potential government shutdownon Oct. 1, but were no closer to resolving the question on how to fill a gaping shortfall in the next state budget.

Senate Republicans on Monday passed a continuation budget that would extend the current spending plan for 30 days past the Oct. 1 start of the next fiscal year.

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As of 12:15 a.m. Monday morning, leaders of the House, Senate and administration had failed to make any headway on passing a solution to the state's looming $1.75 billion Fiscal Year (FY) 2008 budget deficit. The House technically continues on in session, although the chamber is standing at ease until noon with members having headed off to grab some sleep.

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Nerves frayed, tempers flared and words were more heated Saturday as Republicans and Democrats in the state House -- which has met almost continually since Friday morning -- struggled unsuccessfully to find common ground that will balance the state budget and avoid a government shutdown Oct. 1.

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A House deal on a balanced state budget slid further from reach Saturday as Democrats and Republicans continued bickering late into the evening over taxes and spending, and government moved another day closer to possibly shutting down.

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The Michigan House reconvened this afternoon, as a third day of deliberations on a plan to raise the
state income tax from 3.9% to 4.6% dragged on at an almost glacial pace.

Gov. Jennifer Granholm welcomed some of the members back from a four-hour recess to support an
attempt by House Democrats to enact the income tax hike they say is needed to address a projected $1.7
billion deficit in the fiscal year that begins Oct. 1.

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If it was up to state Rep. Robert Jones to solve Michigan's budget crisis, households would be paying about 38 percent more in state income taxes.

If Sen. Cameron Brown and Reps. Jack Hoogendyk, Tonya Schuitmaker and Fulton Sheen were calling the
shots, there would be no tax increase, only spending cuts.

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Michael Boulus, whose job is to look after the interests of Michigan's colleges and universities, is mad.

Hopping mad at what he sees as self-destructive and irresponsible behavior on the part of the Michigan Legislature.

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Twelve hours into their stalemate over an income tax increase to solve the state's $1.75-billion budget problem, House members decided to take a break and get some rest early today.

The chamber will "stand at ease" until 7 a.m., Majority Floor Leader Steve Tobocman told members at
1:30 a.m. The House's electronic voting board remained open with 43 of the 56 votes needed to approve
the tax increase--from 3.9 percent to 4.6 percent, and send it to the Senate.

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As midnight struck, a House vote to raise the state income tax 18% was still in limbo early today, nearly 10 hours after voting began.

The voting board, which never recorded an official tally, was wiped clean and lawmakers resumed
efforts to reach the needed 56 votes, quickly reaching the 43 votes they had before midnight.

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A House vote to raise the income tax rate from 3.9 to 4.6 percent stretched through the afternoon, evening, night and well into the weekend as Democratic leadership worked to get between 10 and 15 Republicans to hop aboard a bi-partisan budget solution for next year.

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Given the clock and the late date, a continuation budget at this point is in Michigan's future most folks will tell you.

"Technically, they've gone beyond the date in which you can administratively implement a budget agreement," Lt. Gov. John CHERRY told MIRS tonight.

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House Speaker Andy Dillon said Thursday he thinks there's a 40 percent chance that state
government will be forced to shut down Oct. 1 because of a budget impasse.

"I used to say I think there's a 30 percent chance of a shutdown, and now I'm putting it at 40 percent," Dillon said. "With every day that goes by, it becomes much more risky that we are going to miss the deadline."

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House Democrats promised to consider a tax hike in a rare Friday session, while Senate Republicans sketched a scorched-earth scenario Tuesday to illustrate what would happen to state government if the entire $1.75 billion state budget deficit is erased with cuts and no tax increases.

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Cities could lose cops, theaters lose grants and college students could potentially face mid-year tuition increases, under a plan laid out Tuesday to balance the state budget without raising taxes.

Senate Fiscal Agency Director Gary Olson presented the option to the Senate Appropriations Committee at the request of Senate Majority Leader Mike Bishop of Rochester.

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By month's end, the legislature and governor must hatch a deal on the state's 2007-2008 budget. Michigan's future as a prosperous and forward-looking state hangs in the balance. Wisdom and foresight must trump threat, fear and intimidation.

At least $1.7 billion in current spending is unsupported by revenue -- that's nearly 20 percent of the $9.3 billion General Fund. Writing the upcoming budget is a very difficult challenge.

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The state budget standoff apparently will last at least one more day as the countdown to a possible state government shutdown on Oct. 1 continues.

State lawmakers and Gov. Jennifer Granholm are struggling with a deficit of $1.7 billion to $1.8 billion.
The current budget year expires in less than three weeks and without a new budget, there likely would
be an interruption in at least some state services.

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If Republicans in Lansing are as good as their word, this week could reveal whether they dare actually to
balance the budget without a tax hike. But it has to be better than the half-loaf list unveiled last week by
Senate Majority Leader Mike Bishop, who threw out $1 billion worth of numbers too vague to be of
much use.

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House Speaker Andy DILLON (D-Redford Twp.), agitated that Senate Republican leadership isn't willing to negotiate on how to raise the money needed to close next year's $1.75 billion budget gap, is looking to hold a vote on a tax increase Friday.

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A dozen area school districts started the year without teacher contracts in place.

A major factor is the state Legislature's inaction on school funding.

``That's the big issue,'' said Doug Pratt, spokesman for the Michigan Education Association, the union for
teachers.

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When state lawmakers return to Lansing on Tuesday, they'll face the looming possibility of a government shutdown and an unresolved debate over whether to raise taxes to stave
off a $1.8 billion deficit when the next fiscal year begins Oct. 1. Lawmakers in both parties estimate the odds at 50-50 that the state could shut down the government at the end of the month in the absence of passing a fiscal 2008 budget.

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Countdown to chaos?

It's a campaign slogan of groups that fear no tax increase or balanced budget will be in place when state
government's new fiscal year starts in three weeks.

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Michigan legislators insist they're close to a deal to save the state. Really, they are.

But if you heard House Speaker Andy Dillon, D-Redford Township, and Senate Majority Leader Mike
Bishop, R-Rochester, on Paul W. Smith's radio show Friday morning you'd be hard pressed to believe
there's much common ground in the budget debate.

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Sometimes in politics the doable takes precedence over the preferable. That's the case now with the state budget fight in Lansing. We would have preferred that the deficit be resolved by matching spending
with available revenue, rather than asking struggling Michigan families to contribute more to satisfy the
insatiable appetite of state government.

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Over the years we've seen a lot of campaigns come and go out of Lansing but perhaps none have
had a better slogan than "Countdown to Chaos."

The campaign is made up of various groups around the state that would directly be impacted if a new state budget for fiscal year 2008 is not in place Oct. 1.

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Despite long hours of intense bargaining that stretched late into the night Thursday, lawmakers and Gov. Jennifer Granholm again failed to reach accord on solving the state's $1.8 billion fiscal crisis, which almost certainly will involve a major tax increase.

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Time is evaporating for state officials to deal with Michigan's upcoming fiscal year in a sound, responsible manner that addresses current budget shortfalls while also developing long-term strategies for the state's economic future.

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Voters won't get a chance to raise the state sales tax in November after all, as frustrated lawmakers
missed a key deadline and left for the weekend without agreement on a billion-dollar-plus tax plan for the state's 2008 budget.

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For more than a quarter of a century, I have focused my research on understanding the effects of taxes.
Do taxes matter? Of course they do.

But it's important to keep things in perspective as the governor and Legislature debate how to balance
the state budget and avoid an estimated shortfall of $1.8 billion for the upcoming fiscal year. Public
discussion about taxes in Michigan has often been dominated by shrill and exaggerated rhetoric.

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For the past five years, Michigan government spending has exceeded the taxpayers' ability to pay tax
revenue. The "structural deficit" has grown steadily as overall spending increased, the rainy day fund
was drained and higher education and local government revenue sharing were drastically cut, among
other things.

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Gov. Jennifer Granholm and legislative leaders appeared to be making progress Wednesday in their efforts to resolve the state's budget crisis, as an Oct. 1 deadline -- and a shutdown of government services -- looms.

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Lansing's politicians are nearly out of time to clean up the state's fiscal mess, and the public should be out of patience, too.

Unless lawmakers adopt a budget and taxes to cover a $1.8-billion shortfall for the fiscal year beginning Oct. 1, this crowd will claim a record for partisanship and ineptitude rivaling any we can recall.

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Buy a bagel and a latte for $4.99, and the state gets an extra 30 cents. Buy four a week for a year and pay $62 in sales tax.

Buy the kid shoes for $39.99 and pay $2.40 in sales tax. Buy eight pairs for the family over a year, and about
$20 goes from your pocket to Lansing.

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The Senate moved all eight House-originated budgets today after stripping the budgets of all funding (See "MBT 'Fix' Leaves Senate," 9/5/07).

The bills were passed with the understanding that whatever points of difference may exist between what the Senate really wants to do with the budgets and what the House proposed could be ironed out in conference committee. The budgets in question include the state's big-ticket items — Corrections, School Aid, Universities and Community Health.

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From 10 a.m. to 4 p.m., a House committee passed through Fiscal Year (FY) 2008 spending plans for half of state government.

For the rest of the evening, the full House tore a page out of the Senate's playbook by erasing everything the committee had done and inserting zeros in its passed budgets. The maneuver appeared to be done to speed up the budget-developing process, seeing that the beginning of the FY 2008 fiscal year is in three weeks.

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What appears to have been a loose plan to raise revenue by putting a sales tax increase on the ballot and immediately passing a temporary income tax hike fell apart Thursday, sending budget negotiations back to square one with the state's legislative leaders broaching who will be to blame for a possible government shutdown.

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With pressure building to reach a budget solution by Sept. 30, bipartisan talks in the Legislature are intensifying over whether to ask voters to approve an increase in the state sales tax from 6 percent to 7 percent.

Lawmakers have until today to place a constitutional amendment -- a requirement for increasing the sales tax rate -- before voters on the Nov. 6 ballot.

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State senators fed up with the House's reluctance to pass a tax increase that may be needed to stop the state from shutting down next month walked over to the House Thursday evening to urge their House counterparts to get moving.

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Hours of closed door meetings and rare displays of public pressure on Thursday failed to resolve Michigan's state government budget crisis.

The state Senate adjourned shortly after 10 p.m. without any deal being reached to fill an estimated $1.7 billion shortfall in the budget year that starts Oct. 1. The House stopped voting shortly after 11:15 p.m.

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FOR decades, Michigan was the place where people without many skills moved to find a good-paying job. That brawn-based economy has
been dying for decades, and while the sudden wholesale elimination of auto jobs in the last two years was a shock, it wasn't an enormous
surprise. That is, unless you have been in the Michigan Legislature, where reality has been something to be ignored.

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From AARP to the UAW, about 40 groups met on the Capitol lawn on Wednesday to begin the Countdown to Chaos, an urgent reminder to budget leaders that there was 25 days, - and counting - until the October 1 beginning of the next fiscal year, at which time a lack of budget would threaten to shut out thousands of Michigan businesses and services.

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The emergency financial task force Gov. Jennifer GRANHOLM spurred into action last year to come up with ways to address the state's sinking budget situation issued a "strong plea" today for "everyone in Michigan to stop blaming each other, face facts and move this state forward together."

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Legislative and administrative leaders met behind closed doors today about the prospects of giving voters an option as soon as this November of keeping in-place a yet-to-be-increased income tax or bumping up the sales tax one cent to 7 cents as a way to raise between $1.7 billion and $2 billion.

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Growing frustration over Michigan's state government budget problems bubbled to the surface outside the Capitol on Wednesday as an end-of-the-month deadline to find a solution neared.

Groups that support a tax increase to boost services in the fiscal year starting Oct. 1 began what they called a "countdown to chaos" to try and pressure lawmakers to act. A panel that includes former Govs. William Milliken and James Blanchard also pressed the Legislature, saying "it is time for everyone in Michigan to stop blaming each other, face facts and move this state forward together."

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A former lawmaker who helped balance the state's out-of-whack budgets in the early 1980s said today that Michigan's current fiscal crisis is worse than any he ever dealt with in his 22 years in the Legislature.

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Students returning to classes this week will find more congested classrooms, fewer schools and fewer bus routes as districts face more budget uncertainty than ever this fall.

That means some teens in Garden City will walk miles to school because the district cut high school
buses. Warren Consolidated students will pay more for lunch and admission to athletic events.

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State Sen. John Pappageorge, RTroy, has introduced legislation that is intended to make Michigan's budget process more manageable and help prevent future deficits.

At first glance, you could question why Senate Joint Resolution E is even needed. But in reviewing the state's current budgeting system, the resolution couldn't do any harm
and just might make lawmakers a bit more fiscally responsible.

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Michigan lawmakers and Gov. Jennifer Granholm return to work at the state Capitol today, facing the
same dilemma that has vexed them all year -- raise taxes or cut spending.

After a summer of mixed signals, false starts and short workweeks, the Legislature resumes a full
schedule this month, facing an Oct. 1 deadline to address a $1.7-billion to $1.8-billion projected deficit in the 2007-08 budget.

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State lawmakers and Gov. Jennifer Granholm will spend the next four weeks negotiating how to cover a
$1.8 billion state budget deficit. Some sort of tax increase seems inevitable, given the size of the budget and the lack of will in Lansing to substantively reform government.

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During Thursday's caucus meeting, Senate Majority Leader Mike BISHOP (R-Rochester) suggested ballot proposal scenarios that could take place this coming week, including one that hikes the sales tax 1 cent.

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The Michigan AFL-CIO enters the Labor Day weekend pushing for a tax increase to support state government services and promising to help lawmakers who might face recalls for voting in favor of revenue increases.

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Most West Michigan school districts would see a $200 per-child increase in their school funding under a budget plan that cleared the state House Thursday.

But area educators don't plan to go on a spending binge, saying they don't expect the plan from the Democratic led House to clear the Republican-dominated Senate.

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State House and Senate leaders, following an all-night budget session in the House, say
they'll meet privately at a Midwest legislative conference in Traverse City early next week in their
continued talks on the budget and taxes.

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Lawmakers started passing 2008 budgets for the department of state government on Wednesday, but they hadn't yet determined how much revenue will be available or whether to impose a tax increase.

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Well, at least Michigan isn't at the bottom of this list.

Though the state lost 19,800 jobs between June and July, it wasn't the worst in the nation. That "honor'' went to North Carolina, which saw a loss of 20,700 jobs during that period, according to the U.S. Bureau of Labor Statistics.

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After a marathon session covering parts of Wednesday and Thursday, it wasn't clear how much closer the Legislature had moved to resolving a looming budget crisis for the fiscal year that begins Oct. 1.

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The battle of the budgets is joined. Gov. Jennifer Granholm wants tax hikes, the Republicans don't and
House Democrats are in the middle. It is a classic case of gridlock, and the buzz around Lansing is that
the governor will try to cure the legislative logjam with dynamite: a government shutdown.

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Rep. Kevin Elsenheimer, the assistant minority leader in the Michigan House, told the Emmet County Republican Women’s Club on Monday that it’s the wrong time to ask Michigan residents to pay more in taxes.

“The state is a long way from spending money appropriately, and — I see it every day — in a $42 billion budget, there is plenty of room for cuts,” said Elsenheimer, R-Bellaire.

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Hancock Schools Superintendent John Vaara isn’t mincing words when it comes to the state’s delay in giving schools a projected 2007-08 budget.

“Inter-party fighting is playing a real part here,” he told members of his district’s school board Monday. “It’s a political football with neither side willing to take a stand before they really have to.”

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I was pleased to accept Mike Hansen’s invitation to appear before you this morning to discuss the issues that face our state because maintaining a strong education framework is an absolutely critical part of successfully dealing with those issues.

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Michigan's universities are not pleased to be forced to raise tuition because of falling state appropriations. And contrary to impression left by the Aug. 7 Grand Rapids Press editorial ("Sticker shock at state's colleges"),
universities have been wise stewards of the money they receive, reforming operations and reducing costs in many ways.

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The state government could shut down this year for the first time in Lt. Gov’s JohnCherry’s 32 years of involvement if a budget solution is not reached by Oct. 1.

During an interview with the Daily Mining Gazette Friday during his tour of the Upper Peninsula, Cherry said little in the way of action was likely to happen until the legislature’s return in September.

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The dramatic and tragic collapse of the bridge on Interstate 35W in Minneapolis on Aug. 1 has made one thing crystal-clear — there is a price to be paid for neglect.

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Gov. Jennifer Granholm’s administration and the state legislature have been at odds for some time now over a solution to Michigan’s budget crisis. The state is facing a $1.8 billion shortfall for fiscal 2007-08 in an almost $10 billion budget, Lt. Gov. John Cherry said. He discussed the budget and other state issues with the Daily Press on a visit Wednesday to
Escanaba.

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Business growth in Metro Detroit -- new ventures and expansion of existing ones -- fell dramatically in the past 12 months compared to the previous year, reflecting the region's slumping economy and uncertainty for much of the year over the state's plans for a new business tax.

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As the presiding officer in the Michigan Senate and a former lawmaker with decades of experience serving in the Michigan House of Representatives and the state Senate, I have seen a fair amount of political gamesmanship in Lansing. But I cannot remember a year when the Senate has failed to pass a single budget bill by mid-August, as is now the case.

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The decision of Hillsdale College to decline state aid for its students and instead provide them with privately raised scholarships is an important step in guaranteeing its educational independence. And it may be a model worth emulating for other private schools.

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Gov. Jennifer Granholm, who leaves Saturday for a week-long European trade mission, slammed the Legislature Tuesday or failing to pass a state budget, adding that the time for talking about it is over.

"The Legislature needs to act. It's not about talking anymore," said Granholm.

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For aspiring teachers such as Lindsey Schaap, Hope College doesn't waste time getting them into
a classroom.

Education students are placed in the field from the first class and gain practical experience in almost every
course before spending a semester as a student teacher.

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Where does the rabbit go when placed in a hat? How much money does Michigan spend each year on road repair? What about on cable TV for prisoners?

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In a move his Republican counterpart calls unusual yet fitting, Saginaw County's Democratic boss has pledged his party's support for a school tax campaign.

County Democratic Chairman Bob Blaine has offered time and manpower to help Saginaw Township Community Schools pass a nearly $40 million bond proposal, Board of Education President Judith A. Lincoln told her colleagues Monday.

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Michigan's regional universities took a shot Monday at a proposal to provide separate taxpayer funding
to the state's two largest universities when the regional schools serve larger percentages of non-
Michigan students.

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Michigan families, reeling from the state's economic downturn, need a break, especially as the start of
school approaches. And so do the state's ailing retailers. Both could be helped by creating a back-toschool
sales tax holiday as other states are doing.

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Gov. Jennifer Granholm told university presidents and Democratic board members that she'd boost their state
aid next fiscal year if in return they rebate back to students some of this fall's hefty tuition hikes.

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U.S. Rep. John Dingell's pitch for a massive increase in gasoline taxes makes little
sense standing next to a fuel pump shoveling another $50 into your tank. But from the boardrooms of
Detroit's automakers and the halls of Washington's think tanks, it appears better than most alternatives.

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Gov. Jennifer M. Granholm told university presidents and Democratic board members that she'd boost their state aid next fiscal year if they rebate to students some of this fall's hefty tuition hikes.

Granholm last week didn't make clear what new revenue would fuel that appropriations boost. Note to struggling French Lit majors: Don't give up that second job on football weekends slinging drinks to obnoxious alums who paid a lot less for their degrees than you will.

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Kent County voters have said "no" twice in the last four months to a millage increase for Grand Rapids
Community College. That shows school officials have some work to do before asking again, particularity in suburban and rural sections of the county.

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ESCANABA — Fall is just around the corner and local school districts are hitting the books, preparing for staff and students’ return. Items on their to-do lists include completing calendars and schedules, maintaining buildings and hosting activities for incoming students even though much of the school finances remain up in the air, said administrators.

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State Rep. Mike Lahti, D-Hancock, says an increase in the state’s income tax rate may be a necessary part of solving the state’s ongoing budget problems.

He said further cuts may put necessary state services in jeopardy.

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Finding money to fix state roads has drawn more attention since the bridge collapse in Minnesota last week. The Michigan Chamber of Commerce, among others, reignited their 9-cent gas tax increase proposal days ago, but other states are looking at "a mileage tax."

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Lt. Gov. John Cherry said the governor must recognize the possibility that the prolonged impasse over the Fiscal Year (FY) 2008 budget could result in a government shutdown. To not do so would be irresponsible.

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The recent collapse of a major Minnesota bridge has revved up the pro-gas tax hike coalition, which wants to raise the tax by 3 cents for the next three years to fix roads and bridges.

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Proponents of a bill to impose a new tax on phones are discounting their fare. Instead of a $1.35 per phone line monthly charge, supporters are suggesting a fee of 99 cents.

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Gov. Jennifer Granholm on Monday asked leaders of the state's 15 public universities to consider
lightening the burden of recently approved tuition increases in return for a funding increase of up to 5
percent this fall.

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Gov. Jennifer Granholm is right about one thing -- rising college tuition in Michigan has the potential to be a politically potent issue in 2008.

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Michigan is making higher education increasingly unaffordable for its residents. The latest round of tuition and fee hikes approved at the state's 15 public universities averages about 11 percent. Not many families are seeing household incomes jump anywhere near that much.

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State lawmakers and Gov. Jennifer Granholm are preparing for a debate over how much state aid universities should receive just as the bills for fall tuition are arriving in thousands of households.

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There are a number of ideas to recommend in a proposal Michigan House Republicans call the ``College Family Bill of Rights.''

But one provision prompts some puzzlement.

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If you are paying for college right now, you can thank state lawmakers and Gov. Jennifer Granholm for passing a hefty tax increase your way.

That’s right, it’s a tax increase, not a tuition increase. By delaying action on next fiscal year’s state budget,
lawmakers and Granholm in effect forced state-supported universities and colleges to guess how much money would be coming from Lansing when deciding next year’s tuition rates.

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As the days tick away to Oct. 1 the likelihood that state government will
shut down because the governor and the Legislature can't pass a budget
grows ever larger.

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Democratic Gov. Jennifer Granholm and Republican Senate Majority Leader Mike Bishop, R-Rochester, have spent months locked in a partisan policy debate over the best way to resolve the state's budget deficit and boost the state's growth in the future.

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Cash-strapped Michigan has postponed $54 million in state and federal payments to hospitals, promising to pay on Sept. 26 money that was due in April and July, an unprecedented delay.

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If the upcoming state budget doesn’t preserve education funding, Michigan will lag farther behind, the Michigan Senate minority leader said Tuesday.

“The states with thriving economies, the states with high per capita income, are states that are
producing a higher proportion of college graduates than Michigan is,” said Mark Schauer, D-Battle Creek.

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Western Michigan University leaders Tuesday approved a $299 million budget that includes a $5.9 million deficit but no layoffs or program cuts.

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With tuition at record highs, university leaders in Michigan say the Legislature's continued cuts to higher education threaten the existence of public universities.

"When you have six years of disinvestment, you're making a statement that the state's privatizing its university system," said Michael Boulus, executive director of the Presidents Council, State Universities of Michigan, a group that represents the state's 15 public universities.

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Incoming freshmen will pay an average $815 more to attend one of Michigan's 15 public universities this fall. Tuition increases have averaged 11.3 percent. Some universities, such as Wayne State and Ferris State, have raised rates with contingency fees that could be eliminated if state aid payments are received. Below is the cost
for a full-time, in-state student taking 30 credit hours for the year, as well as the dollar amount and percentage of increase.

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Tony McCaul works three part-time jobs and has an internship and student loans, and he's
dreading the bill coming soon from Michigan State University, where he'll be a senior this fall.

Like students across the state, McCaul, 22, of Lake Odessa will pay a lot more this year than last fall -- a 9.6% hike in his case.

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Things are headed in the wrong direction in Lansing. While state lawmakers have promised to get serious about streamlining government and reforming the way it operates, last week Democrats showed their hand: They really don't mean it.

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Continuing financial difficulty at many of Michigan's public schools are magnified this summer because of uncertainty about the state government budget for next fiscal year.

Some Michigan school districts are laying off teachers or not hiring replacements for those who retire.

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The Michigan Legislature recessed again last week without resolving the state budget crisis.

They might be back next week for a few hours of general session. They might not. The House is scheduled to meet a grand total of four days in August; the Senate has five days
penciled onto its calendar.

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Michigan's state government budget situation is one of the worst in the nation, in large part because the
state's struggling economy has sapped tax revenues.

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A word to the wise: Ease up on that lead foot, because Michigan State Police are back on full patrol.

Ending a five-month-old edict that limited some troopers to as few as 40 miles during an eight-hour shift, the 1,000 uniformed patrol troopers are now free to drive to their heart's content chasing down drunken drivers, speeders and other lawbreakers.

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The Saginaw Valley State University Board of Control approved increasing undergraduate tuition 12.9 percent for 2007-2008 during a special meeting Friday.

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Michigan signed a pact with other states three years ago to recoup a chunk of the $264 million a
year it loses in uncollected tax revenue on Internet and catalog sales to state residents from out-of-state companies.

But so far, this state is losing $7 million to $10 million annually on the deal.

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Something about this story doesn't make sense. Instead of being united, the state's law enforcement community is deeply divided on a plan to raise new dollars to fight crime.

The pending legislation is the so-called phone tax, which would raise about $135 million to fund the
CSI state police crime lab and a host of other do-gooder services designed to put the bad guys behind bars.

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University of Michigan student Maria Sviridova says life is already too expensive. So she doesn't support
legislation that would put a $1.35 monthly tax on every land and cell phone in the state.

"I feel I'm contributing enough to the economy,'' she said Tuesday while studying beside the fountain at
Briarwood Mall, her cell phone within reach.

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Saginaw Valley State University students will pay 12.9 percent more in tuition this fall than last.

Board of Control members approved the boost this morning, more than doubling last fall's increase of 4.9
percent.

The college is following a public university trend. SVSU was the last of the state's universities to set rates.

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After learning Western Michigan University approved a tuition hike Tuesday, incoming freshman Ashley Bell considered herself pretty lucky.

The recent Saugatuck High School graduate will pay 5.7 percent more in tuition than students paid last year --
the lowest percentage increase approved by a state university so far this year.

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Michigan is headed in the right direction, but Governor Jennifer Granholm said she is concerned the state Senate is not working hard enough.

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Students returning to Western Michigan University this fall will pay on average about $400 more to attend the Kalamazoo-based college, following tuition hikes approved Tuesday afternoon.

The university's board of trustees passed rate increases that will bring the yearly education cost to $7,260 for freshmen and sophomores and $7,950 for upperclassmen, a difference of $394 and $436, respectively.

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Most people don't remember Phil Mastin or David Serotkin -- if they ever have heard of them.

But a statewide anti-tax group wants to make certain state lawmakers know what happened to Mastin and
Serotkin when the former lawmakers voted for a temporary tax increase in 1983.

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Some government leaders are TIF'd off that they're missing out on a lot of property tax money.

But a tasty $23.6 million that tax-increment financing districts have withheld from Bay County schools, governments and agencies from 1995 to 2006 might not exist if those economic development tools hadn't been created.

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One of government's basic jobs is protecting its residents, and this service should be financed by general funds, not special taxes. The Granholm administration, including State Police Director Peter Munoz, are promoting a $16.20-a-year tax on all telephone lines for 911, crime lab and other police services.

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The University of Michigan's governing board approved tuition increases for its three campuses Thursday, joining a long list of public state universities where students
will face higher bills in the upcoming academic year.

The increases in part reflect uncertainty about the level of aid from state government, which is struggling with budget problems. But in most cases, the University of Michigan percentage increases won't be as large as those planned at some of the state's other
public universities.

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State lawmakers returned to the Capitol on Tuesday after a two-week break with the growing realization it might take all summer to resolve Michigan's government budget problems.

Democratic House Speaker Andy Dillon of Redford and Republican Senate Majority Leader Mike Bishop of Rochester were working to hammer out a schedule for key votes needed to fill what could be at least a $1.6 billion hole in the budget for the fiscal year that starts Oct. 1.

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Michigan's budget crisis, brought on by President George W. Bush's failed economic policies and bad trade deals, endangers education, health care, and safe and stable communities -- the very services that are most likely to attract the good-paying jobs of the future.

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About 2,000 state prison inmates who perform services for Michigan communities -- from digging graves
and shoveling snow to planting flowers and cutting grass -- are being laid off.

State Department of Corrections officials said Tuesday they will shut down 208 work crews within 30 days to save about $6 million annually. They will continue to use inmates on 42 other crews who work for state government agencies, such as the Department of Transportation. The crews average 8-10 inmates each.

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State and local law enforcement officials peddled dueling messages Tuesday about the proposed $1.35 monthly fee on all land lines and cell phones to pay for public safety programs and services. One group slammed the so-called phone tax, saying the legislation was hastily drafted and poorly defined, meaning it likely could be used for programs unrelated to public safety and may hurt some local police services.

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A move to consolidate five Downriver fire departments that's been hailed as a model program for regionalization is stalled amid concerns about job security.

Since fall, officials from the tight-knit communities of Allen Park, Lincoln Park, Wyandotte, Southgate and
Melvindale have studied merging departments to improve services and save some $11 million per year after startup.

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State lawmakers returned to the Capitol on Tuesday after a two-week break with the growing realization it might take all summer to resolve Michigan's government budget problems.

Democratic House Speaker Andy Dillon of Redford and Republican Senate Majority Leader Mike Bishop of Rochester were working to hammer out a schedule for key votes needed to fill what could be at least a $1.6 billion hole in the budget for the fiscal year that starts Oct. 1.

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Michigan's latest round of outrageous college tuition hikes has made the challenge of paying for college even more worrisome for students and their families.

But the state's political leaders don't seem nearly as concerned. The double-digit tuition increases at several state universities have been met with near silence by the people voters elected to represent their interests. The hikes should at least generate a serious discussion in Lansing about higher education policy.

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Local officials are fighting state pressure to combine services, saying consolidation may actually
bloat government costs, rather than shrink them.

Consolidation is being floated by Gov. Jennifer Granholm, House Speaker Andy Dillon and the House
Democratic majority as part of their efforts to streamline government and save money. They are pushing
legislation that could take the first steps toward combining school districts and restricting townships' authority.

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There is definitely money-saving potential in legislation being pushed by state Senate Republicans to require a common calendar for school districts in the same county.

But before sending this bill on to Gov. Jennifer Granholm, who supports it, the Democratic controlled state House should make sure it has adequate flexibility built in for any districts with peculiar characteristics that might require a deviation from the countywide calendar.

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Michigan State University's tuition increase for the 2007-08 year isn't pleasant for students and families. Adding nearly 10 percent to a bill never is.

But the alternatives were even more unpleasant. Credit MSU leaders for upholding their responsibilities to the university - a stark contrast to the ducking and dodging that dominate the Capitol these days.

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Any vote to raise Michigan taxes is probably weeks away, but the specter of recalls already casts a
large shadow over the Capitol and lawmakers' districts.

State Rep. Richard Ball, R-Laingsburg, knows better than most. An anti-tax group already has
brought a giant pig to his district, circulated fliers and sought to hire circulators for recall petitions.

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Lawmakers return to Lansing this week, tanned and rested from a two-week break and ready to do ... what now? Their jobs, perhaps?

Perhaps not. After all, there are months left to burn as they delay the inevitable.

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Incoming Central Michigan University freshmen will pay more than 20 percent more for tuition than the class before them, and university officials say the state is to blame.

Board of Trustees members Thursday unanimously approved raising tuition to $304 per credit hour from $251 - a 21.1 percent hike.

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The Michigan House of Representatives will vote soon on a proposed public safety surcharge of $1.35 on all phone bills to fund a variety of law enforcement programs -- most of which have nothing to do with telecommunications. But what's even worse is that this tax will diminish access of Michigan individuals and businesses to phones and the Internet, making them less productive and competitive compared to other
states.

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Central Michigan University may not offer future undergraduates a guarantee that their tuition rates will not change for their first five years of study after uncertainty over state funding caused it to boost tuition 21.1% for first-time, in-state students enrolling this fall.

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This week, Oakland University and Michigan State University hiked their tuition rates, the first of a wave of
higher college costs that threaten to sink the education hopes of many students and their families.

Oakland raised tuition by 14 percent on Wednesday, the largest increase since 1982. Michigan State leaders
preceded them by raising Spartans' tuition by 9.6 percent. Central Michigan Thursday raised tuition 21
percent for freshmen, but guaranteed no additional hikes for them for five years.

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At the height of the summer camping season, Michigan's Department of Natural Resources on Monday closed about 20 state forest campgrounds in the northern Lower Peninsula and eastern Upper Peninsula.

Closing the rustic campgrounds, which offer pit toilets and often require campers to pump water by hand, will save the state's Recreation and Trail Program $75,000.

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As the state with the nation's highest unemployment rate, Michigan is in no position to let jobs slip away.

That's why lawmakers need to find some time this summer to tackle fuel tax and vehicle fee increases to boost road construction.

This week, the Detroit News reported on a disturbing trend - a steady decline in construction jobs in the state. The cause - Michigan's weak economy and declining work for public infrastructure, such as roads.

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Maybe it's a good idea that the warring parties in Lansing are disengaging for a while.

We don't begrudge lawmakers their summer vacations, which they took this week over the objection of Gov.
Jennifer Granholm, who demanded they stay in the Capitol until a budget deal was reached. They didn't, but
we doubt their brief time-off will make a difference in negotiations that seem to be going nowhere anyway.

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The Oakland University Board of Trustees voted unanimously Wednesday to raise average undergraduate tuition by $971 to $7,928 for the 2007-08 school year. Support for the roughly 13.9 percent hike came reluctantly from board members who said university administrators have done everything in their power to limit the effects on
students of state funding cuts.

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Gov. Jennifer Granholm today signed a new state business tax into law.

Granholm, in a ceremony at the Capitol, signed the bill approved by the Legislature last month, as she was flanked by 10 Democratic lawmakers and one Republican.

She said the Michigan Business Tax will promote economic growth, and reduce taxes for 70% of those businesses that now pay the Single Business Tax (SBT) which expires Dec. 31.

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Gov. Jennifer Granholm on Thursday signed Michigan's new business tax into law.

The Democratic governor, surrounded by Democratic lawmakers and a Republican, said the Michigan Business Tax will encourage businesses and jobs to grow in the state.

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Lawmakers need to reject ;egislation that would impose an ill-advised $1.35 monthly fee on phone users statewide. This plan to create a separate Public Safety Fund to cover expenses for the State Police and others is a bad idea. Public safety is a core responsibility of government. The dollars to finance this essential service must
come from the primary source of funding for operations, the state general fund.

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Rockford High School graduate Robby Zaahm figured he would have to land a job to help pay for his studies at Michigan State University this fall.

But after trustees there approved a 9.6-percent tuition hike Wednesday, the 18-year-old now thinks he will have to get at least a couple of jobs and borrow from his parents to afford college.

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Central Michigan University's (CMU) Board of Control today determined the amount freshman tuition will increase — establishing an annualized 4.2 percent increase. This means the tuition a five-year CMU senior pays five years from now will be 21 percent higher than it was his or her freshman year.

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Gov. Jennifer Granholm RANHOLM put her signature on the state's new business tax today, formally putting in place a replacement for the Single Business Tax (SBT), which will expire at the end of the year.

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Get on with it, Lansing.

Save public services with a combination of cuts and tax increases that were negotiated last month.

Our elected representatives in the Michigan House and Senate have piddled away far too much time ignoring this solution, and arguing over government reform wish lists.
Meanwhile, the state edges closer to a projected $1.6 billion deficit in the budget year that starts on Oct. 1.

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Michigan will soon see a very visible sign of the state's dismal economic condition -- its roads will be rutted
and crumbling.

The state can't sustain spending on road construction projects with tax revenues declining. And federal funds are drying up.

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While the 2007-08 budget is still in flux, Michigan's public universities are moving ahead to set tuition rates for the upcoming school year. Some are looking at ways to cut costs to
minimize the increases, but others say there are no substantial cuts to make. Here is a look at what each university is considering and how much money it lost or had deferred last year.

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Ever hear about Procrastinators Anonymous? Members of the group knew they had a problem, but they kept putting off a meeting to do anything about it.

That's what comes to mind as the Legislature takes another week off instead of meeting to work on the budget for the fiscal year that begins Oct. 1, a budget that is projected to have a shortage of up to $1.8 billion between what the state now funds and its anticipated revenues.

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Steep tuition increases are not foregone conclusions for at least some of the state's public universities this year, as their leaders meet this month to figure out how to balance budgets stretched thin by state aid cuts without placing the burden on the backs of students.

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Michigan's 2008 budget year begins in 81 days. Today, Michigan State University trustees will vote on tuition increases enlarged by uncertainty in state financing - a story that could get repeated on other campuses this summer.

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If a proposed $1.35 fee on all phones to help fund law enforcement in Michigan is such a great idea, then why are so many law enforcement organizations against it?

It's not surprising that the Telecommunications Association of Michigan is against it.

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Michigan State University and Oakland University each weighed in Wednesday with significant tuition hikes for the fall.

Oakland’s board approved a 13.9% increase in tuition, the largest increase, in terms of dollars, of the four public universities that have already decided their rates for 2007-08. An incoming, in-state freshman taking 30 credit hours at Oakland will pay an average of $971
next year.

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In these days of "revenue enhancements," the quickest way to detect a back-door tax increase is to look for the words "mandatory fee" or surcharge.

House Democrats are pushing legislation that would impose a $1.35 monthly fee on every cell phone and land line in the state. Broadband lines using Voice over Internet Protocol also would be subject to the surcharge.

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Drive around Michigan today, try to get through road-construction detours, dodge orange barrels and wonder how on earth to get there from here, but remember: It could be worse.

If Michigan were not pouring hundreds of millions of borrowed dollars into road repairs and improvements, the state's transportation infrastructure would be crumbling ever faster.

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Monday was a sad day for campers who like to get away from downstate civilization and really rough it.

At the height of the summer camping season, Michigan's Department of Natural Resources closed about 20
state forest campgrounds in the northern Lower Peninsula and eastern Upper Peninsula.

Closing the rustic campgrounds, which offer pit toilets and often require campers to pump water by hand, will save the state's Recreation and Trail Program $75,000.

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Tom Wascha is among many local parents whose ears nervously perk up to reports of a possible 6 percent to 17 percent tuition increase at
Michigan State University.

Wascha, whose son, Eric, will be a senior at the University of Michigan-Flint this fall,
sees it as a troubling sign of what's to come.

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Ypsilanti city administrators are proposing $2.4 million in spending cuts over three years if the city fails to raise additional revenues. The cuts include funding for six firefighters, four police officers and bus service.

City Manager Ed Koryzno said city revenues are estimated to drop from $14.9 million this year to $14.3 million in 2009 after the former Visteon plant closes in 2008. The plant is the largest taxpayer in the city.

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If a proposed $1.35 fee on all phones -- landlines, cell phones and even voice-over-Internet protocol -- to help fund law enforcement in Michigan is such a great idea, then why are so many law enforcement organizations against it?

It's not surprising that the Telecommunications Association of Michigan is against it. The association started an advertising blitz in opposition last week.

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The Department of Natural Resources (DNR) announced today its closing 20 rustic Northern Michigan and Upper Peninsula campgrounds starting Monday as a way to save $75,000 for the Fiscal year (FY) 2007 budget.

The impacted campgrounds are primarily tent camping sites located in rustic settings. The non-staffed campgrounds are not part of the DNR's online reservation system. The closings are not permanent.

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Tuition is going up 6.7% at Ferris State University for the 2007-08 school year.

The university’s Board of Trustees voted unanimously this afternoon to increase it to an average of $8,265 a year.

New in-state freshmen will pay about $8,460 annually, based on a course load of 15 credits per term, and returning students will pay about $7,680 annually.

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At 20 rustic state forest campgrounds in northern Michigan and the Upper Peninsula, camping is officially off-limits beginning Monday, a victim not only of budget cuts but the remote nature of the campgrounds themselves.

On Friday, officials with the state Department of Natural Resources announced the closings of the campgrounds, which have no electricity and no showers.

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The Department of Natural Resources announced Friday it is closing 20 of its 138 state forest campgrounds at the peak of the summer tourist season because of budget cuts.

The primitive campgrounds, with space for 498 campers, will close from Monday through the end of the summer to save $75,000 that has been trimmed from the $5 million budget for the department's Recreation and Trails program, said DNR spokeswoman Mary Dettloff.

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Trust is the key ingredient missing from the state budget talks. The parties struggle to get to the point of publicly shaking hands on a deal because they don't trust each other to honor commitments made behind closed doors.

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Michigan has a new business tax and a group of giddy legislators and the governor are breaking their arms patting themselves on the back for getting a deal done before going on vacation.

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They command nearly $80,000 a year, receive $12,000 for expenses and enjoy lifetime health insurance that begins at age 55 after six years of service.

Michigan legislators found time this year to authorize Be Kind to Animals Month, pondered a bill on "Ride Your Motorcycle to Work Day" and considered a state poet laureate.

Oh, yeah, they also fiddled much of the spring while plunging revenues burned an $800 million hole in the
budget and Michigan's bond rating fell again. Lawmakers elected last week to take a two-week vacation with no agreement in sight, a development Gov. Jennifer Granholm called an "inexcusable failure."

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University students and their parents are facing double-digit tuition increases for the fall if lawmakers fail to restore a 10-percent cut in state aid or fund increases that Gov. Jennifer Granholm proposed in her budget.

But Granholm said Friday that if nearly $200 million in funding promises are kept during summer budget work to come, the 15 public schools should hold fall tuition increases to inflation. Faced with a funding loss, universities apparently are prepared to hike average tuition and fees above the $8,000 mark, up $3,000 from just six years ago.

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Effective Sunday, the Ann Arbor Police Department will lose seven civilian employees to layoffs, ending a uneasy period of uncertainty for many in the department, but triggering a difficult transition that officials say will inevitably impact public service.

The eliminated positions range from those who deal directly with the public by answering questions and taking reports at the department's front desk, to those who are less visible but have roles in producing crime-analysis reports, logging property, and assisting detectives.

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Michigan should consider creating its first toll roads to ease congestion and help plug an alarming $44 billion shortfall in transportation funding over the next 23 years, according to a new report from the Michigan Department of Transportation.

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Hundreds of kids in Michigan may not be going to camp this year after a lack of funds in the state budget forced the Department of Human Services to stop sponsoring summer camp opportunities for at-risk children.

"Because of the budget situation in the state, we have had to make some tough decisions between providing services to needy at-risk children and sending some children to camp," said Maureen Sorbet, spokeswoman for the Department of Human Services, which manages the money.

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At long last, Michigan has a replacement for its hated Single Business Tax.

Lawmakers approved the new Michigan Business Tax late Thursday over the strong objections of the Michigan Chamber of Commerce, the state's largest and most influential business group.

The Republican-controlled Senate voted 32-3 in favor of the plan, while the Democrat-dominated House
approved it 75-34. Gov. Jennifer Granholm, who was involved in negotiating agreement on the tax, will sign the legislation, aides said.

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Michigan businesses finally got a new tax Thursday, more complex than many wanted but one that lawmakers said will encourage new jobs and cut taxes for about 70% of businesses that now pay a tax.

Final passage came after a deal reached June 13 was tweaked to resolve concerns from contractors and some small companies that their tax bills would mushroom under the plan. But a late bid from the insurance industry failed to convince legislators to make changes to reduce its tax load.

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As state political leaders pay lip service to the importance of higher education in Michigan's future, but refuse to invest accordingly in it, college students and their families are about to get hit again in the wallet.

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A landmark new business tax that rewards companies for building and hiring in Michigan was approved Thursday by a Legislature struggling to help the state out of its seven-year economic funk.

The new Michigan Business Tax takes effect Jan. 1, replacing a 1970s-era Single Business Tax generally reviled by its payers as a complicated impediment to growing jobs.

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The top Republican in the Legislature and Democratic Gov. Jennifer Granholm on Thursday continued sparring over a tax increase and cost savings in state government.

Senate Majority Leader Mike Bishop, R-Rochester, said he will not allow a vote on a tax hike until Granholm
halts a pay raise that state employees are scheduled to get in October. He also said Michigan should freeze tax breaks for low-income workers that are set to take effect in 2008.

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Call it Deal or No Deal II.

Gov. Jennifer Granholm, in a confidential letter to legislative leaders that arrived Tuesday, strongly urged them to cancel their two-week summer break, slated to start next week, and remain in town to pass an agreement to raise taxes and make cuts to close the state's $1.8 billion budget deficit for next year.

"This inexcusable failure to act not only causes the Legislature to break faith with the citizens who pay our
salaries and rightfully expect work to come before pleasure, but it also puts the state's recovery on hold," the letter stated.

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The state's unresolved budget crisis could mean university tuition increases as high as the double digits this fall.

Michigan State University and Wayne State University are already considering tuition hikes ranging from 10 percent to 14 percent if the state cuts funding by as little as 1.5 percent -- a scenario experts say is becoming increasingly likely as lawmakers have yet to find a way to replenish state coffers.

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As police grapple with the usual summer surge in crime, this year the department has a new worry: Nearly 600 extra criminals could be leaving prison soon and heading back to Detroit.

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Gov. Jennifer Granholm greeted Michigan lawmakers returning Tuesday morning to the Capitol with a letter demanding they cancel a summer break scheduled to begin next week to implement what she called an “agreement on a comprehensive solution to our budget crisis.”

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It's good to have goals. Even better to accomplish them. And so it would be very good for the Legislature to meet its goal of passing all the requisite bills for the new Michigan Business Tax by the end of this week.

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As June comes to a close, SVSU is still struggling to finalize a budget for the 2007-2008 fiscal year. This is largely because of the state legislature's inability to resolve a looming budget deficit for the fiscal year of 2008.

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If the state Legislature finally acts on a proposal to raise taxes in Michigan, it could be the most pressure-packed vote ever faced by some of the lawmakers now at the Capitol.

A few Republicans and Democrats in vulnerable seats could face recall efforts if they vote in favor of a tax increase. And lawmakers from both parties worry about the consequences in their districts,
no matter which way they vote on the yet-to-be-specified but widely anticipated tax proposal. It's expected to originate in the Democrat-controlled House.

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Michigan cannot afford to miss the opportunity provided by its budget crisis to finally enact far-reaching changes in the way state government does business. Despite the lip service paid to reform in Lansing, the emphasis remains on raising taxes, rather than reforming government.

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Michigan taxes rank in the middle among U.S. states and the state pays more than most for employee salaries, prisons and public schools but less for public universities.

A far-ranging Free Press review of tax and spending studies for states challenges both conservatives' claims of a bloated government and liberals' claims that the state has cut to the bone.

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If Michigan's economic mantra, chanted from the depths of our one-state recession, is that business tax reform should be geared toward growing the New Economy jobs the state needs, how come the long-awaited legislation is tilted toward the Old Economy?

"You need wealth generation to exist in the state," House Speaker Andy Dillon, D-Redford, told me in an interview. "What Michigan has is its vast industrial base, and it's not just autos. It's furniture. It's chemicals. It's military and homeland security. That's what we need to build on."

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They've been going back and forth for months in Lansing over the budget crisis, and each side has stuck pretty close to its guns. But by now, there are some solutions that are plain and obvious, no matter the partisan rhetoric. The question is whether state leaders can stop bickering -- this week's business tax plan was encouraging -- and face up to the reality that is facing Michigan.

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As Shakespeare wrote, "There's many a slip 'twixt the cup and the lip." Still, it's hard to envision legislative leaders and the governor backing away from the important budget deal they finally reached late last week.

Why it took so long, though, is worthy of speculation. Replacing the revenue from the onerous Single Business Tax in its entirety was explicitly what the voters ordered up last November.

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A plan as complex as a new business tax can't be digested in a few hours or a day. Still, what is known - so far - about the bipartisan Michigan Business Tax proposal is cause for cautious optimism.

The tax plan is to be revenue neutral, in that it should generate the roughly $1.9 billion the expiring Single Business Tax does. That's essential in dealing with Michigan's ongoing budget crisis.

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The battle over tax hikes and the 2008 state budget heated up Wednesday with Republicans and Democrats accusing each other of bare-knuckle politics and blackmail.

Republican representatives said House Democrats have threatened to reduce state funds for schools and colleges in their districts, including Central Michigan University, Macomb Community College and St. Clair Community College, unless Republicans support higher taxes.

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With Wednesday's compromise on a new business tax, Gov. Jennifer Granholm and the Legislature plugged a big hole in Michigan's leaky budget boat. The new business tax would produce for the general fund about the same revenue as the current Single Business Tax, about $1.9 billion a year.

But it won't erase a remaining deficit heading into next fiscal year that's estimated at $1.6 billion or more.

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Apparently everything isn't "on the table" when it comes to reforming state government. If everything were, the governor would reconsider the $110 million in raises that are due to be paid to state employees next year.

But she won't.

"Our focus is on the new contracts that we'll be negotiating in August," says Liz Boyd, Gov. Jennifer Granholm's spokeswoman. Granholm will not ask that current contracts be renegotiated because state workers already have made enough concessions, Boyd says.

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Gov. Jennifer Granholm continues to make reference to an extended sales tax as a method to deal with Michigan's chronic budget crisis.

If she's using the sales tax issue merely as a tactic to gain greater legislative consideration of other
ideas, fine.

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Violent crime is up across the nation.

We know that from the Federal Bureau of Investigation's annual Uniform Crime Report, which amasses crime statistics from more than 17,000 police departments nationwide.

What we don't know is what's causing it and how to return to the trend of the 1990s, when violent crime rates drifted lower every year.

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State Police troopers are spending more time sitting on road shoulders and at their desks, and less time patrolling Michigan highways and communities, because a budget cut is limiting the miles they can drive.

Troopers say the travel restrictions, which cap mileage as low as 40 miles per eight-hour shift at some posts, keep them from catching as many traffic violators, drunken drivers, armed robbers and other law-breakers as they did before the limits were in effect.

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The state Legislature's answer last week to the current budget crisis was basically that of the "Popeye" character J. Wellington Wimpy: "I would gladly pay you Tuesday for a hamburger today."

Half this year's $800 million shortfall will be filled by borrowing against future tobacco settlement funds. The rest will be plugged by a mishmash of cuts and shifts.

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Remember when magician David Copperfield made the Empire State Building disappear before a live television audience? The building sure seemed to be gone, but any sane person watching knew the magic was merely an illusion.

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Michigan lawmakers return to Lansing today fresh from reaching last Friday's interim budget agreement, their first bipartisan breakthrough of the year but one that appears to have touched off little celebration from any quarter.

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State lawmakers took the easy way out on a budget deal announced Friday. They apparently avoided a tax increase during the current fiscal year, but did so by shortchanging colleges and universities, and employing various gimmicks that will make financial woes more difficult to fix in fiscal 2008, just four months away.

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It seems the battle over Michigan's budget is getting a tad tilted. One side doesn't want to get its hands dirty.

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More than 30 years ago I was drawn to Michigan by two qualities this state had in abundance -- an intense focus on the future and a strong commitment to education.

It was a good move. I worked at Wayne State University for 16 years and at Western Michigan for another 20 years and built a good career in higher education. Sadly though, those two qualities that signaled Michigan's commitment to progress have become traits of the past. It's time to bring them back by raising the revenue needed to rebuild our infrastructure.

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In a move to crank up the pressure on state leaders who are considering deep budget cuts to balance the books, a coalition of local schools and governments, health care providers and others said Monday the state needs a tax hike because it can no longer afford to slash essential services.

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As of today, there are 102 days left to close an $802-million gap and balance the state budget as the Michigan Constitution requires. That means cutting spending by about $8 million a day through Sept. 30, and every day of delay takes that number a little higher.

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As partisan wrangling continues over fixing a state deficit now pegged at $800 million, Republicans deserve most of the blame for the failure to approve a remedy.

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Republicans would like to preserve an economic platform of tax cuts and smaller government, but their actions have gotten in the way.

In co-authoring a budget mess that apparently has to be cleaned up by reversing tax cuts worth billions of dollars over time, the GOP is about to go through an identity crisis that in the end might not be all that bad.

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A deal to close the gaping hole in this year's state budget collapsed Tuesday over the same issue that has stalled agreement for months: Gov. Jennifer Granholm wants a tax hike to be part of the solution and Senate Majority Leader Mike Bishop won't make that pledge.

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Intense bargaining Tuesday again failed to produce a compromise to resolve the state's budget crisis, as Gov. Jennifer Granholm and Senate Majority Leader Mike Bishop accused each other of bad-faith bargaining.

She said he under represents by more than $300 million the size of the deficit in order to avoid serious negotiations on what she says is a needed tax increase.

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No deal yet.

Gov. Jennifer Granholm and lawmakers remained at odds Tuesday over fixing a hole in the state budget. Negotiations will continue Wednesday.

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Three days of private talks among lawmakers to resolve the state's fiscal crisis ended Monday with budget-cutting recommendations and a dispute over a final deal.

Senate Republican Leader Mike Bishop, R-Rochester, announced an agreement that would erase $399 million of an anticipated $715-million budget deficit this year without a tax increase. He said the deal would cut state aid to schools by $36 per pupil, instead of the $122-per-pupil cut Gov. Jennifer Granholm has ordered.

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The Chief Judge of the Michigan Court of Appeals today announced a series of administrative moves aimed at trimming some $1 million from the court's budget with only four months left in the fiscal year -
including eight days off for court workers.

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In response to some $840,000 in proposed cuts to the Court of Appeals FY 2006-07 budget, Chief Judge William Whitbeck announced on Friday that the court will shut down for at least eight days this summer, saving the court about $60,000 per day.

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Birgit Klohs knows first-hand what happens when business taxes remain in limbo: She lost out on a chance for the Grand Rapids area to compete for an $8-million investment that would have yielded as many as 450 new jobs.

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In attempting to right the state of Michigan's fiscal ship, Gov. Jennifer Granholm hasn't been the strongest of leaders, but most of the blame for the stalemate in Lansing can be laid at the feet of Republicans, who mismanaged state finances for more than a decade and are slow to take responsibility for the mess they created.

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Gov. Jennifer Granholm said Monday she is an increasingly agitated "gentle soul" who is running out of patience with Republican refusals to consider taxes as part of a budget compromise.

Speaking in Clinton Township to a group of education officials and representatives of the health care industry, Granholm said she is looking to negotiate with GOP lawmakers for a solution to the state's $700 million deficit. But she expressed no regrets for the sharp criticism she has directed at the Republican leadership for their no-taxes ideology.

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Like most people, Tracey M. Baker doesn't welcome paying more.

But Baker, the owner of Tiffany's restaurant in Frankenmuth, and many others could pay up to 60 percent more in coming years for Saginaw County health inspections, administrative reviews and licenses.

The higher fees will hit business owners, developers and residents who dig wells in their yards, to name a few examples. Even nonprofits will feel the sting.

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Nearly two of three Michigan residents responding to a newspaper survey said the state should raise taxes and cut spending simultaneously to fix the state's budget crisis.

More of those polled favored a higher sales tax than an income tax increase, according to the survey published in Monday editions of The Detroit News.

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"We take full responsibility for Michigan's fiscal crisis. We vow to resolve our differences, to compromise and to work together to solve this mess - no excuses. That's our job.''

How refreshing it would be if state leaders from both parties made a statement like this. It's virtually impossible to imagine, isn't it?

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Republicans have only themselves to blame for being outflanked by Democrats on an issue the GOP thought it owned: How business is taxed in Michigan.

Railing against the Single Business Tax as a "job killer" has long been a staple for GOP politicians who nonetheless failed to do much about it. Three different times the GOP has engineered a phase-out of the SBT, ranging from 23 years to 18 months. Republicans just haven't figured out a credible replacement.

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The search for a successor to Michigan'