State budget agreement reached
Posted: 09.08.2010 at 5:22 PM
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LANSING -- A tentative agreement to balance Michigan's state government budget is starting to move through the state Legislature.

Democratic House Speaker Andy Dillon and Republican Senate Majority Leader Mike Bishop signed off on the tentative deal Wednesday.

The Republican-led Senate also voted 21-14 mostly along party lines to transfer more than $200 million from the state's school aid fund to the general fund, a key step toward balancing this fiscal year's budget.

Lawmakers also face a projected deficit of $484 million for the budget year starting Oct. 1.

The budget-balancing plan would include a tax amnesty proposal and an incentive package aimed at getting more state employees to retire.

Several details are yet to be worked out.

Governor Jennifer Granholm issued the following statement on the budget agreement: 
“The agreement we’ve reached reflects our state’s most important priorities:  creating jobs, educating children, and protecting citizens while building on the steps we’ve taken over the past seven years to address the fiscal challenges caused by the national recession and struggles in the auto industry. 
 
“The agreement cuts state spending, attacks the state’s structural deficit, and continues reforms in government.  These changes are essential if we are to maintain our critical investments in job-creation and education and provide the services citizens need during this time of economic transition.”
 
The agreement reflects the governor’s continuing effort to reform state and local government to make it less costly, more flexible, and better able to serve the needs of citizens.  
 
The budget includes savings from reforms the governor outlined in January, including changes to the state employee retirement system that are expected to result in the retirement of more than 6,000 employees, a lower-cost health-care plan for new state employees, and incentives for shared services or consolidation among local school districts.  In addition, the agreement includes spending cuts that impact every state department. 
 
Altogether, the budget will include approximately $600 million in general fund spending reductions.