Granholm, leaders continue budget talks

LANSING, MI – Governor Granholm held a conference call this morning with the Legislature's Republican and Democratic leaders to continue negotiations on the budget. The state's new fiscal year begins in eight weeks.

The state's facing a deficit of $1.8 billion in its General Fund. It would be almost a billion dollars bigger without federal stimulus money to help cover a shortfall in Michigan's School Aid Fund.

Robert Emerson is Governor Granholm's budget director. He says Democrats want to avoid some big cuts proposed by Republicans, including eliminating the state's universal college scholarships, and reducing health care payments.

"You know, we're trying to help them reach targets that are reasonable," he said. "We don't think you can do it all with cuts. We think there needs to be revenue. I don't think we've been shy about saying that."

The governor's proposed eliminating some tax breaks and higher taxes on cigarettes, beer, and soda pop as possible ways to raise more money.