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Taxes rise, Michigan government shutdown ends
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| Contributor | The Sunset Provision |
| Last Edited | The Sunset Provision Oct 01, 2007 12:18pm |
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| Category | News |
| News Date | Monday, October 1, 2007 06:00:00 PM UTC0:0 |
| Description | The state Legislature agreed early Monday to raise the income tax and expand the sales tax to services in a deal with the governor that quickly ended a partial state government shutdown.
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.
Applause broke out in Democratic Gov. Jennifer Granholm's office when the final vote was announced at 4:18 a.m. The deal prompted Granholm to call off the partial shutdown of government that began at 12:01 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 that technically 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.
The Republican-led Senate finished passing the package at the end of a draining, marathon session that covered parts of three days. Members of the Democratic-controlled House stopped voting and left the chamber before 4 a.m. since the only key vote related to the deal |
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