Granholm open to options
- 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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