LANSING ? Gov. Jennifer Granholm, Senate Majority Leader Ken Sikkema (R-Wyoming) and House Speaker Craig DeRoche (R-Novi) met Wednesday in what was described as a “pleasant” meeting to discuss an agreement to fix an estimated $375 million problem with the 2004-05 budget.

How to handle funding for higher education remains a point of difference, DeRoche said. Discussions are continuing and there is a chance an agreement will be reached yet this week, although it is more likely a new budget-cutting executive order will be issued next week.

Granholm’s proposal to fix some $219 million of the 2004-05 budget problem through an executive order budget cut was defeated last week when the Senate Appropriations Committee rejected it on a party-line vote. The House Appropriations Committee had earlier approved it.

Officials said proposals for budget cuts brought by the Senate were reviewed at the meeting. The speaker said the issue of whether to cut spending to the state’s 15 public universities and 28 community colleges remains a notable difference. Granholm wants to reduce funding to the universities and colleges by $30 million while seeking to reduce the sting of the cut by offering up $100 million in bond money for maintenance to the schools.

The House and Granholm had agreed to approve the cut, but delay its actual implementation until late in the summer to see if revenues flow to the state in bigger than anticipated numbers. If more money arrives, universities and colleges would get dibs on it to wipe out the reduction.

But Senate Republicans have said that agreement is based on a hope, not concrete revenues – and still represents a breach of the promise the state made with universities and colleges for the 2004-05 fiscal year not to cut their funding if the schools kept tuition increases to the rate of inflation.

No formal meetings between the governor and the leaders are planned at this stage, said Granholm’s press secretary Liz Boyd, although discussions are continuing.

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