Michigan lawmakers racing clock to avoid partial state shutdown

9/23/2007

LANSING, Mich. - Time is running out to fix Michigan's state budget mess.

State lawmakers began filtering into the Capitol on Sunday afternoon for a rare weekend session, trying to avoid a possible partial government shutdown when the new budget year starts Oct. 1.

The state faces a projected $1.75 billion deficit in the upcoming fiscal year. No consensus on how to balance the budget has emerged despite months of negotiations between Democratic Gov. Jennifer Granholm, the Democratic-led House and Republican-led Senate.

Granholm has not detailed what a shutdown plan might entail. But failure to find a budget solution within the next few days could result in a wide range of disrupted services including state police patrols, secretary of state offices, state parks, health screenings, and even perhaps the Michigan Lottery and Detroit casinos. Payments to K-12 schools and universities also could be slashed.

The House has failed in attempts to raise the state's personal income tax rate from the current 3.9 percent to 4.6 percent. If successful, the tax increase would raise about $1.1 billion, leaving roughly $650 million to be resolved through cuts or other revenue increases.

Senate Republicans last week offered to vote on an income tax rate of 4.3 percent, which would raise roughly $660 million and leave about $1.09 billion in cuts. Democrats were opposed to that plan because it didn't raise enough money, so it was never voted on.

Senate Republicans have approved a 30-day extension of the current budget structure, which would buy lawmakers a little more time to craft a long-term solution. Democrats have resisted a continuation budget, saying a long-term fix to Michigan's financial problems should not be delayed.

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