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Granholm open to options

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  • Charles C. Primas
    March 31. 2007 6:59AM Granholm open to options Governor still pushing proposal to tax services. TIM MARTIN Associated Press Writer
    Message 1 of 1 , Apr 1, 2007
      March 31. 2007 6:59AM
      Granholm open to options
      Governor still pushing proposal to tax services.

      Associated Press Writer


      LANSING -- Gov. Jennifer Granholm continued to push Friday for a tax
      increase to help pay for state government, but reiterated she is open to
      options besides her plan for a 2 percent sales tax on some types of

      "There are a lot of options," Granholm, a Democrat, said after speaking to a
      forum sponsored by the Michigan League for Human Services. "We are open to
      any alternatives. We are open to resolution."

      Among the possible options are a tax on utilities or an increase in the
      income tax, both of which could meet strong resistance from Republicans who
      say tax increases would hurt Michigan's economy.

      Granholm again said the state must use a mix of spending cuts, reforms and
      revenue enhancements to balance a government budget dragged down by
      Michigan's sluggish economy and past tax cuts.

      So far, Republicans and Democrats have agreed on cuts, delayed payments and
      accounting changes that eliminate about one-third of a projected $940
      million budget deficit for the fiscal year that started Oct. 1.

      But the state Senate, led by Republicans, has voted down Granholm's plan to
      tax some types of services such as legal work, golf and haircuts. House
      Democrats haven't rushed to embrace the plan, either.

      Democrats aren't on board with many of the additional budget cuts that the
      Senate has passed.

      Granholm told the Michigan League for Human Services audience that the state
      has an obligation to provide services for the state's most vulnerable
      residents. She also said the state must invest in education, worker training
      programs and economic diversification efforts to improve Michigan's business
      climate, which based on the unemployment rate has been among the worst in
      the nation in recent years.

      "It's not just about filling a hole," Granholm said of the budget debate.
      "It's about positioning Michigan in the future for all of our citizens for

      Also on Friday, House Republicans criticized a bill introduced by House
      Appropriations Committee Chairman George Cushingberry that would raise the
      state's income tax rate.

      Cushingberry, D-Detroit, would raise the state's current income tax rate of
      3.9 percent to 4.6 percent -- the same rate it was in the early 1990s --
      until 2012. After that, the rate would return to 3.9 percent.

      "We can't afford to take more money out of families' budgets," said Rep.
      Rick Jones, a Republican from Grand Ledge. "The income tax is the last thing
      that should be raised."

      Another idea noted by Democrats, but not formally introduced, would call for
      a graduated income tax that typically would charge higher rates to wealthier


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