LANSING ? Michigan Gov. Jennifer Granholm seems to have conceded to the retooled business tax plan making its way through the Legislature and said Wednesday she is willing to sign off on the bills as long Republicans leaders don’t change anything in the proposal and – a very big and – Congress does not pass what she said would be $1 billion in cuts over five years to Michigan through its deficit reduction strategy.

While on one hand, Granholm said the state wants to provide relief to manufacturers because “our economy has been so tied to the automotive industry,” on the other hand if Congress moves forward with cuts to child support programs, students and the poor, Granholm said “All bets are off,” in regard to tax cuts for Michigan manufacturers, which passed both legislative chambers this week.

“How could we possibly afford $1 billion in cuts?” she commented after doing a call-in radio show in the morning on Michigan Public Radio Network.

Legislative Republicans chastised the governor for holding up manufacturing relief on something that is in the hands of Congress.

“The governor’s statements just signal again she is searching for excuses,” said Matt Resch, spokesperson for House Speaker Craig DeRoche (R-Novi). “We can only control Michigan things that we have control over. If we get caught up and use Washington, D.C., we would just stand still and never accomplish anything.”

Ari Adler, spokesperson for Senate Majority Leader Ken Sikkema (R-Wyoming), said the state cannot continue to focus its attention solely on its budget. The state had to focus on developing its economy and jobs. But, Adler also said the Senate was delighted Granholm is willing to support the tax cut in process.

Granholm said she is content with the package of tax cut bills approved almost unanimously by the Senate on Tuesday (SB 203, SB 909 and SB 910), but said, “We will be watching the House.”

Using additional state revenues for the first year of the tax cut plan also seems to have support from the governor, but after that, the cuts would have to be paid for with a restructuring of the business tax system, Granholm said.

In doing a restructuring of the Single Business Tax, Granholm suggested legislative leaders go back to her proposal from February that would cut the tax rate sharply, provide personal property tax credits and shift some higher tax rates onto industries such as insurance.

The governor adamantly rejected the idea of a sales tax increase, also being called by some Republicans as the fair tax, because it would apply to everyone who purchases goods or services. Granholm seemed increasingly concerned that the proposal would emerge when Republican leaders look to overhaul the SBT in January.

But whatever the state does to aid manufacturers is only one part of the system that will help that industry, Granholm said, putting much of the responsibility on the shoulders of the federal government to step in.

Granholm called for fairer trade agreements that put American manufacturers on a level playing field in the global economy, creation of a catastrophic healthcare pool and a “bridge of time” for companies to be able to pay for their workers pensions.

In regard to the healthcare situation, Granholm said companies are hit hardest in covering the cost of healthcare for their employees and a catastrophic pool would help.

“We are asking manufacturers to play on the field with one hand tied behind their backs,” she said. “This year, for the first time there will be more cars built in Ontario, Canada, than in Michigan. That’s not because of taxes or business regulatory, that’s because of healthcare.”

As what continues to be what Granholm referred to as a de-industrialization in Michigan and across the country, workers also should not have the rug pulled out from under them in terms of their pensions. Her abstract suggestion was for the federal government to allow manufacturers some period of time to pay into the pension system.

During the call-in segment, listeners seemed most concerned about the job situation, with a couple callers saying their jobs have been shipped overseas and with unemployment benefits running out, they need to know what the future of the state holds.

The governor said she is pushing for the federal government to extend unemployment benefits, but also pointed to the diversification of the state’s economy, particularly through the investment in high-tech jobs, as a new avenue of employment for workers in Michigan.

Granholm said there are and will be 90,000 job vacancies in the state, especially in the healthcare and skilled trade sectors, and that people should start looking to put their skills to work in those areas. She pointed to the Michigan Works program that has promised to give 30,000 people job training in those areas by May 2006 (they already have trained 15,000 she said).

During her discussion, the governor also emphasized the areas of advanced manufacturing, homeland security and life sciences, as well as her call for a building boom in local sewer, road and bridge reconstruction as avenues of employment for Michigan workers.

Perhaps the oddest part of her dialogue with callers regarding the jobs issue came when the governor told one female caller, who worked in the information technology sector and was now unemployed, that she should read “The World is Flat: A Brief History of the Twenty-first Century,” which Granholm described as explaining the fall of manufacturing and the information technology sectors to globalization. Granholm has encouraged many to read the book, and acknowledged to the caller that she may not care for its message.

During much of the discussion on Michigan’s economy, Granholm seemed forced to straddle the fence on what the future will bring, saying the unemployed should look toward more training and immersion in the high-tech job world, while also saying she is working on bringing as many manufacturing plants to Michigan as she can and referring to talks she has had with Toyota on expanding their presence in the automotive capital of the world.

Granholm also played up the need to “up the ante” on education in the state to provide a strong workforce by ensuring students’ education is relevant and competitive to the global economy. That includes making K-12 and higher education a priority in the state budget.

The governor seemed supportive of curriculum standards in K-12 schools and helping college-bound students with a $4,000 Merit scholarship, as well as having universities breakdown bureaucratic tape by allowing them to jump onto state contracts for services and equipment.

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