Dear Colleagues:
 
I want to bring you up to date on the state of Michigan's 2007 and 2008 budgets and to say thank you once again for your service to the people of the great state of Michigan.
 
While I know we continue to share a vision of Michigan where our work as public servants is building a state in which jobs are plentiful and every family has the opportunity to succeed - our situation remains daunting.  The good news is that we were able to resolve the FY '07 budget without devastating cuts to schools and health care or implementing layoffs and furlough days for state employees; and just yesterday, the Legislature finally agreed on a replacement for the Single Business Tax that is due to expire at the end of the year.  However, the bad news is that the 2008 budget deficit remains unresolved with a $1.8 billion shortfall, and all options for resolution are still on the table when the new fiscal year begins on October 1.  You may have heard that some state departments are laying off staff now - this is true and extremely unfortunate.  But they have to cut costs in order to balance their '07 budgets. 
 
I've talked to many Michigan business leaders around the state and have told them the same things I say to so many people:  while we can and will streamline Michigan's government operations, the services state employees provide to citizens are second to none.  You provide work that is less expensive and just as good as work being done in the private sector.
 
In fact, Janet Olszewski, director of the Michigan Department of Community Health, shared that her department just finished digitizing more than 40,000 paper records of the children they serve who live with serious medical conditions like cystic fibrosis, hemophilia, and cerebral palsy.  The employees who transformed these records just made it easier to provide quality health care to these children, saving time and taxpayer money in the process.  This is a true win-win.  
 
While I know that state employees have made huge sacrifices to help balance the state's budget, we will all be asked to tighten our belts even further in 2008.  I want you to know that I also made it clear that everyone, including our leaders, will need to make sacrifices to help Michigan get back on her feet.  The bottom line is that we have a $1.8 billion budget deficit in our 2008 budget that has to be resolved, and I believe and have proposed that a long-term budget solution can be found in a mix of cuts, reforms, and revenues.
 
As you well know, we have already cut hundreds of millions of dollars from this year's budget, and a series of reforms are underway, including elimination of state departments and consolidation of the state's human resources, purchasing, and accounting services.  We are also looking at reforms that will offer significant savings in the years ahead.  However, neither cuts nor reforms alone will solve our fiscal crisis.  I hope you'll make your voices heard as citizens, as you have before, to your friends, your families, your communities, and those who represent you.  We are clearly willing to make the cuts and implement reforms - but that is just not enough.  The solution cannot be to cut our way to the bottom.  
 
After working together to resolve nearly $4 billion in budget deficits over the last four and a half years, there's little question that the challenge facing us is especially painful.  I hope you know and can appreciate the great good you are doing for the future of this state.  I appreciate your public service more than I can express, and as always, I am proud and honored to serve with you during these difficult times.  I will continue to communicate with you to keep you informed about our budget crisis and how it affects you and the work that you do.
 
Sincerely yours,
      
Jennifer M. Granholm
Governor