The Associated Press
3/5/03 1:24 PM

LANSING, Mich. (AP) -- For months, Gov. Jennifer Granholm has been warning that the cuts needed to balance a $1.7 billion shortfall in the next budget will be felt by everyone in the state.

At noon Thursday, the details on where those cuts will fall will be presented by Granholm and budget director Mary Lannoye to a joint session of the House and Senate Appropriations committees.

Although the state's total budget is around $39 billion, the brunt of the cuts is expected to fall on the $8.8 billion general fund, which covers most spending except for transportation and K-12 education.

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Universities, community colleges and local governments all expect cuts of at least 10 percent in the budget year that starts Oct. 1.

That could push up tuition, which this year rose an average of 9 percent at the state's 15 universities. It also could mean less money for police and fire services, road repair and local parks.

Public schools also are likely to get less money. They're already absorbing $127 million in cuts in this year's $12.7 billion school aid budget. Next school year, that budget may have to be trimmed by $365 million more. Many schools predict they'll have to lay off teachers and trim programs to make ends meet.

The governor has few places to tap for more money. She has said she won't propose a tax hike to deal with the shortfall. The state already has drained its rainy day fund and used up special funds that might have provided needed cash.

Several business groups said Wednesday that they are willing to accept their fair share of cuts, but do not want to see any tax increase on individuals or businesses.

That includes pausing the rollback of the state income tax set to take effect next January. The cut will trim more than $100 million from state revenues over the budget year.

Granholm has said she wants to try to shield K-12 education from cuts, as well as the poor and the elderly who rely on Medicaid and welfare. But she also has told audiences at budget briefings around the state that no department or program will be immune.

"When we are faced with a crisis, we have all got to pitch in," she told an audience in Kalamazoo last week. "If the arts get cut, I hope you contribute to the arts. If health care gets cut, I hope you contribute to (nonprofit) health clinics."

Groups hoping to protect their funding have been lobbying publicly and behind the scenes for weeks. Last Friday, more than 100 people gathered in the state Capitol to encourage continued funding for a program that allows Medicaid recipients to receive long-term care at home.

Granholm has said the budget crisis gives state leaders a chance to rethink what services the state should provide and at what level.

Fiscal policy director Michael LaFaive of the Mackinac Center for Public Policy, a free market think tank based in Midland, said the state could handle its budget problems by getting rid of some departments and shrinking many of the rest, saving $2 billion in state funds and $3.8 billion overall.

Among those he'd put on the chopping block: the Michigan Economic Development Corp. and the state Department of Career Development. Neither of those ideas are likely to get much attention from Granholm, who has placed creating jobs and growing the economy at the top of her agenda.

But LaFaive, who also suggests the state could reap millions by selling the state fairgrounds in Detroit and Escanaba as well as the Ralph MacMullan Conference Center at Higgins Lake, said Granholm needs to think boldly.

"There is a magnificent opportunity in these difficult times to make a huge difference in how state government relates to its citizens -- to regroup, stick to the basics and do them well, and trust the people," he wrote in the introduction to his budget recommendations.

Others have offered suggestions on how to raise more money. State Sen. Buzz Thomas, D-Detroit, proposed Wednesday that the state create specialty license plates backing the Detroit Lions, Pistons, Red Wings and Tigers. The plates would cost an extra $35, with $25 going to K-12 schools.

"Everyone loves their sports teams, and this is one way they can show their support and help the state," Thomas said.

Specialty license plates can earn about $500,000 in their first year of production, so the four plates would mean an extra $2 million for the state budget, he said.

Copyright 2003, The Associated Press