MI Budget chief says plan on 20% cut in government next year

LANSING, MI – Governor Granholm's budget chief say Michigan is facing another budget deficit in the coming fiscal year of $1.4 billion. The governor will present her plan for balancing that budget early next year.

Budget Director Robert Emerson says he does not know how the state will chop another 20% out of its spending after big cuts this year to clinics and nursing homes, local governments, universities, and schools. But Emerson says tax revenues continue to drop, and the state is burning through its federal stimulus money to balance this year's budget.

"We're not doing this to scare anybody," he says. "We're looking at the facts, and the facts are that we have a billion dollar-plus deficit for 2011 because of the loss of federal dollars."

Emerson says he has not seen any evidence that legislative Republicans will agree to revenue options - such as taxing all tobacco products at the same rate as cigarettes, or rolling back business tax breaks - that might help avert another round of double-digit budget cuts.