Governor Granholm unveils her final budget proposal


Governor Granholm says her budget for the coming fiscal year will require difficult cuts. But she says schools, community colleges, universities, and local governments have already been cut too much and should be shielded from more reductions.

The governor wants to expand the sales tax to services and use that money to shore up the School Aid Fund. She says services now make up two thirds of all commercial transactions.

"Since the current sales tax funds schools that means that the base for school funding continues to shrink at a time when we need to invest in education in order for Michigan's economy to be successful," she says.

The governor says she would also drop the sales tax rate by a half-percentage point, and reduce the Michigan Business Tax.

The governor wants to close prisons and find savings in public employee compensation and benefits. She also challenged the Legislature to have the budget completed no later than July 1.