Michigan lawmakers, Granholm reach agreement in concept on state budget solutions

Lawmakers agree on some Mich. budget principles

LANSING, Mich. — Michigan’s legislative leaders and Gov. Jennifer Granholm’s administration agreed in concept Tuesday on ways to balance the state budget, a significant step toward getting a final plan in place by an Oct. 1 deadline.

Legislative leaders and Granholm recently have worked on plans that include spending cuts of about 3 percent for most state agencies, some sort of retirement incentive program for state workers and a tax amnesty program. All of the ideas were most recently proposed by Granholm last month.

Spokespeople for Granholm, Republican Senate Majority Leader Mike Bishop and Democratic House Speaker Andy Dillon would not confirm details of the plan — which hadn’t yet been signed by negotiators — late Tuesday.

Granholm spokeswoman Liz Boyd said the agreement on budget targets was expected to be signed Wednesday and that the administration would comment then.

The agreement would include targets for erasing a general fund deficit of $302 million this fiscal year and a shortfall of $484 million for the budget year that begins Oct. 1. It’s the final round of annual budget bargaining between the term-limited Granholm and legislative leaders, many of whom will be in new jobs — in and out of state government — at the beginning of next year.

Committees made up of members from the Republican-led Senate and Democrat-run House will have to iron out specifics of budget proposals before putting them up for votes in the Legislature. Some proposals could be tough to pass, such as the retirement incentive idea that’s been greeted with skepticism by some Democrats.

Union leaders have been against a similar plan that was passed earlier this year for the state’s public school employees because workers who stay on the job have to contribute more to a retiree health care fund.

Michigan’s public schools should be safe from further budget cuts, but many other agencies will be asked to deepen spending reductions they’ve made in recent years. Granholm has said that can be done without layoffs, but labor union leaders aren’t sure where the savings would come from instead.

“I think it’s going to be a real challenge,” said Ray Holman, legislative liaison for United Auto Workers Local 6000, which represents about 17,000 state workers. “We just don’t have any more things to cut.”

Michigan lawmakers have missed the Oct. 1 budget deadline in two of the past three years. The worst consequence of missing budget deadlines was a partial government shutdown of about four hours in 2007.

Michigan’s constitution requires a balanced budget.