Michigan's government partially shuts down

0 Comments | Deseret News (Salt Lake City), Oct 1, 2007

LANSING, Mich. (AP) -- Michigan's state government partially shut down early today with no budget deal in place for the new fiscal year.

Democratic Gov. Jennifer Granholm was still awaiting key votes in the Republican-controlled Senate after 12:01 a.m., the deadline for approving a state budget. The state has no authority to spend money without a budget in place.

Parts of a temporary budget fix that would have avoided a shutdown were approved Sunday, but lawmakers at midnight were still scrambling to reach a deal on tax increases to help plug a $1.75 billion deficit.

Granholm was waiting for the Legislature to send her the tax increases before she would sign a 30-day budget extension.

The Democrat-led House on Sunday passed a bill that would raise the state's income tax from the current 3.9 percent to 4.35 percent, sending the measure to the Senate, where it faced a much tougher fight.

The House earlier passed a bill placing the state's 6 percent sales tax on a wide range of services, but the Senate had not voted on the measure.

Granholm had told about 35,000 of the state's more than 53,000 workers not to report to work today if a shutdown occurs. The remaining workers would stay on the job.