Granholm aides, lawmakers to go to work on $344 M shortfall

LANSING, MI – Governor Granholm and state lawmakers are expected to work right away this week on a plan to retire a new budget deficit. But first they have to agree on the size of the problem.

A panel of economists came up with an official estimate last week that Michigan is facing a $244 million shortfall in the state's General Fund. But Granholm administration officials say high unemployment continues to put more pressure on Medicaid and food and cash assistance for families. And they say that's added another $100 million to the state's budget shortfall with only four months left in Michigan's fiscal year.

Robert Emerson is the governor's budget director.

"It's going to be a difficult problem this late in the fiscal year to fix, but I think there are options out there and that's what we want to discuss with the House and Senate," Emerson says.

Emerson says one of the options is for the governor to issue an executive order cutting state spending. But that sort of unilateral action could set up a fight with the Legislature.