June 1, 2007

LANSING - In her weekly radio address, Governor Jennifer M. Granholm today noted recent progress on the state's 2007 budget, saying lawmakers must adopt a four-part, comprehensive solution to the ongoing budget crisis, combining spending cuts, government reforms, new revenues, and a new business tax structure.
           
"This step forward is a result of bipartisan cooperation which will be key to any complete solution to the budgetary and economic challenges Michigan is facing," Granholm said.  "We need to move forward with the kind of comprehensive approach I proposed months ago."

Granholm underscored that the solution for 2007 leaves the state facing a $1.8 billion shortfall in October.  The governor has already cut more than $3 billion from state government, more than any governor in history.  And, the state has now exhausted possible one-time solutions, meaning lawmakers now face tough choices in order to find a comprehensive, long-term solution.

Granholm's four-part solution includes hundreds of millions of dollars in spending cuts this year, closing loopholes and finding savings in public employee benefits, and reducing prison costs.  New revenues and replacing the outdated Single Business Tax with a new, highly competitive business tax structure are critical to a solution to the 2008 budget shortfall.  Michigan's economic revitalization plan can be built only on the solid financial footing of a balanced budget that protects education, health care, and public safety from deep cuts.

"We must transform into a 21st century economy and prepare our people to work in health care, research and development, alternative energy and advanced manufacturing," Granholm said.  "That means investing in education, investing in our people, and investing in diversifying our economy."

The governor's weekly radio address is released each Friday morning and may be heard on broadcast stations across the state through an affiliation with the Michigan Association of Broadcasters.  The address will also be available on the Governor's website on Mondays as a podcast for general distribution to personal MP3 players and home computers.

Broadcasters Note:  Governor Granholm's radio address can be accessed through Sunday evening exclusively through the Members Only page of the Michigan Association of Broadcasters Website.

Publishers Note:  The text of today's address is attached.

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Governor Jennifer M. Granholm
Friday, June 1 2007

Hi, this is Governor Jennifer Granholm.

Last week, we in Lansing made some progress on solving our state's budget crisis.

All told, we faced an $800 million shortfall over the next four months.  We made hundreds of millions of dollars of cuts, and pushed some bills and payments to next year and later.

It's not the answer everyone was looking for.  It's not a complete solution.  But it is progress, a step in the right direction, and it allows us to protect health care and our kids' education from very deep, painful cuts.

In reality, this leaves the toughest decisions for the next budget, which begins in a few months.  Still, this step forward is a result of bipartisan cooperation which will be key to any complete solution to this budgetary and economic challenge that Michigan is facing.

We need to move forward with the kind of comprehensive approach I proposed months ago. It has to be a four part solution.

First, spending cuts.  We've made hundreds of millions of dollars of new cuts this year.

Second, government reforms, including closing loop holes, finding savings in public employee benefits, reducing our prison costs, consolidating local government services, consolidating educational services at the local level.

Third, a new, highly competitive business tax structure to replace the outdated Single Business Tax.

And the fourth part of our solution is new revenues, so that we can continue to make the investments that are most critical to our economic future.

The problem we are confronting is that Michigan's economy is evolving - we need to grow other sectors in addition to manufacturing in order to diversify our economy.

We have to transform into a 21st century economy, and prepare our people to work in health care, research and development, alternative energy, and advanced manufacturing. And that means investing in education, investing in our people, investing in diversifying our economy.

With this latest budget negotiation, we found that to adopt more deep cuts would be devastating to Michigan's future.  But we are facing a $1.8 billion shortfall starting in October.  We've exhausted all the one-time solutions in our arsenal. Wall Street is losing confidence in us as we continue to rely on gimmicks. And, I've already cut more than $3 billion from state government, more than any governor in Michigan's history.

To solve this budget crisis we need a sensible combination of cuts, reforms, and new revenues.

I'm encouraged that we have made some progress - we've protected public education in this 2007 fiscal year. Now we need to make the hard choices that will secure Michigan's economic future.

Thank you for listening.