Monday, October 1, 2007

Michigan’s Short Shut Down

The government of the state of Michigan was shut down from midnight to 4:18 a.m. this morning after the state legislature reached a budget deal to keep it up and running.

For a little more than four hours, fewer state police patrolled Michigan highways, campgrounds were closed and road construction projects and lottery sales were stopped. More service interruptions were planned for later in the day until the final pieces of the deal were sent to Democratic Gov. Jennifer Granholm.

Applause broke out in Granholm’s office when the final vote was announced at 4:18 a.m.

”This budget agreement is the right solution for Michigan,” Granholm said in a statement. ”We prevented massive cuts to public education, health care and public safety while also making extensive government reforms and passing new revenue. With the state back on solid financial footing, we can turn our focus to the critical task of jump-starting our economy and creating new jobs.”

Granholm signed a 30-day extension of Michigan’s budget, which expired at midnight. The continuation budget keeps government running.

The Legislature agreed to raise Michigan’s income tax rate from 3.9 percent to 4.35 percent and expand the 6 percent sales tax to some services. Granholm signed both measures. Structural changes to state government — including the management of teacher and other public employee benefits — also are part of the package.

The tax increases should erase most of a projected $1.75 billion deficit in Michigan’s next budget. The final budget for the new fiscal year will include $440 million in spending cuts, including no inflationary funding increase for public universities and community colleges, Granholm said.

I’m sorry to see the state where I lived for seven years and spent many, many summers basically go broke. The combination of job losses in the auto and related industries and tax cuts under the previous administration of Republican John Engler made it pretty certain that at some point it would come to this. Of course the Michigan GOP will use this as a campaign issue, but some times things like essential services such as education, police protection, and health care are more important than scoring pundit points.