Granholm defends MI sales tax expansion


While the Legislature is on its spring break, Governor Granholm continues her efforts to persuade the public to support her budget plans. The governor was on MSNBC Monday to explain her proposal to raise more money for education. She wants to expand the state's sales tax so many services are taxed just like goods. She would lower the sales tax rate to five and a half percent.

"Last century, people spent 60 percent of their disposable income on goods," she says. "This century, 64 percent or 66 percent of their disposable income is spent on services. So our public education system, which we need to reshape our economy, is based on a shrinking base."

The governor renewed her pledge not to cut education spending again. But she's having trouble rounding up support in the Legislature. Republicans, in particular, say they will oppose any new taxes to balance the budget.