LANSING, MI – Budget negotiations are stepping up with the start of the state's new fiscal year now less than six weeks away. Governor Granholm says she still believes a shutdown can be averted. But there are a lot of details and disagreements to be settled first.
Some Republican leaders have alleged Governor Granholm is practicing brinksmanship. They say by pushing budget talks up to the deadline, she is trying to pressure lawmakers into supporting new taxes on soda, beer, tobacco, and entertainment, and also ending some tax breaks to balance the budget. She says that's not true.
"It is utterly preposterous to say that I want to shut down government," she says, "utterly preposterous."
The governor went on to say that a repeat of the 2007 shutdown is not necessary because this year the state's been thrown a lifeline from the federal government in the form of stimulus funds.
"Technically, we could have a budget for this year," she adds. "The difficult decisions now are focused on what happens next year when the stimulus dollars go away, so we will not have to shut down in the same way that we had to in 2007."
The governor went on to say, in response to a reporter's question, that she believes she can spend the stimulus money by issuing an executive order.
Senate Majority Leader Mike Bishop - a Republican -- said that would set up a constitutional battle over the power of the executive branch versus the power of the legislative branch.
"It's a one-line statement in Article 9, Section 17 that specifically says the Treasury shall make no payment unless they receive an appropriation from the Legislature," he says, "and she can't circumvent the Legislature and circumvent the Constitution."
The governor's office issued a statement later saying she does not think she can unilaterally spend the money without the approval of the Legislature.
But the governor does still have her veto authority. And she says she'd veto any budget sent to her desk that does not fund the Michigan Promise scholarship at or near its current level of four thousand dollars for every student who completes two years of college or job training. She says Michigan needs to boost the number of college graduates living here if it's going to attract jobs. She says that's the case she's making to her -quote "partners" in the Legislature including Senate Republicans who voted to zero out the scholarship.
"Those partners are not there yet, but we are committed and I will not sign a budget that eliminates that scholarship and so some large part of that scholarship will remain," she says.
"I agree with that being be a priority. Everyone agrees that education should be a priority."
Again, that's Senate Majority Leader Mike Bishop. Bishop says he does not think the governor's revenue plans have the votes to pass in the Republican-controlled Senate or the Democrat-controlled House. He says that means finding more places to cut.
"If she's not going to make a cut, then how's she going to pay for it?" he asks. "If you're a CEO of a company, and you look at your ledger and you see the red that we see in this state, how do you respond by just saying, 'I'm not going to put up with that cut.' She has to come up with a solution. If she doesn't like the cut, show me the money."
The governor says that's what's being negotiated right now in private meetings with Bishop and other legislative leaders. And Republicans have their own demands, including phasing out a surcharge written into the state's business tax that was part of the deal to end the shutdown in 2007.
The governor says she and legislative leaders hope to craft a two-year budget deal, so spending battles don't have to be fought out again during the 2010 election season.
She says the details of a budget deal, including cuts and new sources of revenue, will be unveiled but only once everyone's agreed to them.