Michigan lawmakers' budget deal in question

6/27/2007

LANSING - It became clearer yesterday just how far away Gov. Jennifer Granholm and the state Legislature may be from finding a solution to next fiscal year's state budget mess.

The main parties can't even agree on what they agreed to last month during high-stakes negotiations.

Ms. Granholm, a Democrat, sent a letter to Republican Senate Majority Leader Mike Bishop and Democratic House Speaker Andy Dillon urging them to resolve the budget crisis before leaving for a two-week summer break scheduled to begin at the end of June. The letter said there was an agreement, reached May 25, to raise the state income tax and expand a sales tax to some discretionary services.

Senator Bishop disputed that yesterday. "There was no agreement, nothing close to an agreement," Senator Bishop told reporters. "For her to suggest otherwise is just an outright mistruth."

A spokesman for Mr. Dillon said he won't comment on ongoing negotiations.

That left Mr. Granholm trying to explain the situation while attending a press conference at Michigan State University to announce a federal grant for a renewable-energy project. The governor was emphatic that a deal had been reached. She was later backed up in a conference call with reporters hosted by Lt. Gov. John Cherry and budget director Bob Emerson.

Ms. Granholm said lawmakers shouldn't leave for summer break with the budget unresolved.

"Universities across the state are trying to decide whether they're going to raise tuition. They have no certainty," Ms. Granholm told reporters.

"School districts across the state are issuing pink slips because they don't know what their budget is going to look like next year."

While both the House and Senate still had vacations scheduled as of yesterday, chamber leaders said they themselves were ready to meet over the break to discuss the budget situation.

The state could face budget deficits of about $1.6 billion to $1.8 billion for the fiscal year that begins in October.