LANSING ? Michigan legislators and the Granholm administration will have $135.8 million in additional revenue on which to wrap up the budget for the current fiscal year and write the new budget for 2005-06, state economists estimated Wednesday.

The administration and legislative leaders had discontinued formal budget negotiations, pending the figures from Wednesday’s revenue estimating conference. With the forecast set, the two sides are expected to resume talks soon, especially with the 2005-06 fiscal year beginning October 1.

Granholm’s Department of Treasury, the House Fiscal Agency and the Senate Fiscal Agency estimated that revenues to the state’s general and school aid funds are $69 million more than had earlier been forecast for 2005 and $66.8 million more than expected for 2006.

Granholm and Republicans, who control the Legislature, are at odds over several major budget items for the 2006 year, and the addition of more revenue than was predicted at the May revenue conference could ease the bridging of those differences.

For 2005, general fund revenues are $79.3 million more than expected, but school aid fund revenues are $10.2 million less than expected. Treasurer Jay Rising said $10.2 million would be taken from the additional general fund revenues to avoid a school aid fund deficit.

Another $14 million for 2005 has been promised to universities and community colleges as part of a prior budget deal. Rising said increasing Medicaid caseloads and other mandatory spending pressures would leave about $10 million to $20 million from the 2005 year to use for 2006.

The Senate Fiscal Agency projects an additional $50 million in lapsed revenues from the 2005 fiscal year being available for use in 2006.

A written statement from Rep. Scott Hummel (R-DeWitt), House Appropriations Committee chair, said the availability of more money than expected “will help in our continued efforts to purchase services for the residents of this state.”

Ari Adler, spokesperson for Senate Majority Leader Ken Sikkema (R-Wyoming), said having more revenue than anticipated “is really more of a blip” in the overall budget work although it helps.

“One of the things we need to get people to understand is this is not extra money,” he said. “What this means is that there’s less of a deficit.”

A myriad of groups and legislators already have claimed dibs on the additional revenue.

The Partnership for Michigan’s Health has asked that funds go to Medicaid. The Michigan Chamber of Commerce has recommended using the money on tax cuts. The Michigan Municipal League, noting cuts to revenue sharing in recent years that it said has hurt public safety and other core services, wants some of the funds restored. The County Road Association of Michigan wants some of the funds spent on county roads. House Speaker Craig DeRoche (R-Novi) has said he would use the money to reverse the House budget bill’s provisions closing the Newberry Correctional Facility and cutting funds to Northern Michigan University.

Adler said Senate Republicans are still evaluating how to use the money.

Granholm press secretary Liz Boyd said the administration is “cautiously optimistic about the numbers,” but how they impact negotiations “remains to be seen.”

Among the major differences on the 2005-06 budget:

Medicaid: Republicans have called for new and higher co-pays for Medicaid recipients that Granholm opposes.

Prisons: Granholm proposed discontinuing the Michigan Youth Correctional Facility in Baldwin. In response, Republicans proposed closing the Newberry prison and the Camp Manistique prison.

K-12 schools: Granholm and Republicans disagree on how much funding to provide for schools with at-risk students.

Welfare: House Republicans have called for a new four-year time limit for welfare recipients that Granholm opposes.

Michigan Economic Development Corporation: House Republicans want a steep cut to the agency they view as ineffective, but Granholm says such a cut would decimate the state’s job creation/retention efforts.

The revenue conference projected general fund revenues for 2005 at $7.994 billion, a decrease of 0.6 percent from 2004. It projected school aid fund revenues for 2005 of $10.84 billion, a 2.12 percent increase from 2004.

For 2006, general fund revenues are forecast to be $8.213 billion, a 2.74 percent increase from 2005. School aid fund revenues are estimated at $11.233 billion, a 3.62 percent increase from 2005.

The conference agreed that wage and salary employment would decline by 0.3 percent in 2005 from 2004 and forecast an annual unemployment rate for 2005 of 7.2 percent. For 2006, the conference projected a 0.5 percent increase in wage and salary unemployment, but an increasing unemployment rate, going to 7.4 percent.

The economists said the risks to their forecast include the financial health of the auto sector, uncertainty in energy prices and changes in consumer spending with rising interest rates.

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