Governor Jennifer Granholm has begun briefing a joint meeting of the House and Senate appropriations committees on her budget proposal for the coming fiscal year. She was greeted with a standing ovation as she prepares to present the final budget plan of her administration.

She says Michigan's revenue has not been this low in 40 years. The state is facing a $1.8-billion shortfall in the coming fiscal year. She says her budget is designed to help shift a 20th Century government structure to a 21st Century government.

The governor says higher education is critical to transforming Michigan's economy. She is proposing a $4,000 tax credit to students who graduate and work in Michigan. She says that would replace the Michigan Promise scholarship that was eliminated last year.

She's also calling for lowering the state's business tax and expanding the Michigan sales tax to services. In exchange, she wants to lower the sales tax rate to 5.5%.

Granholm says funding for schools, community colleges, public universities, and early childhood programs will be maintained at current levels in her budget plan. The governor says she will veto budgets that cut spending on K-through-12 schools. There would be more money for retraining displaced workers. Revenue sharing to local governments will not be cut, either.