LANSING – The 2007-08 Michigan budget completed in the early hours of Wednesday “took a big bite” out of the state’s structural deficit problems, Gov. Jennifer Granholm told reporters at an afternoon press conference. She said the agreement, which sliced her original recommendations by some $433 million, allows the state to move forward on other areas to rebuild the economy.

“It’s good in that we were able to protect public education, health care and public safety,” Granholm said. She called the budget the culmination of a comprehensive, bipartisan solution to the state’s fiscal problems. “I want to thank the Legislature for coming to the center to agree on what were very difficult cuts,” she said.

“What I really want to do is to put this fiscal crisis behind us,” Ms. Granholm said. She added she has “no desire to ever raise taxes again.” Now, she said the state can go back and begin to work the economic plan the governor has in place.

Budget Director Bob Emerson said last year’s budget was balanced with the help of some $1 billion in one-time fixes, none of which were used in this budget. Because of contracts have recently been negotiated with state employees, some of structural deficit was addressed because of that. “With zero increases in 09, that’s going to go a long way to fixing that,” he said.

The biggest cuts were reductions in inflationary increases in education areas and corrections, where prisons and camps were closed, the governor said.

“The budget and the revenues that were decided begin to address and to take a very significant bite in the structural deficit, but we have significant reforms we still have to do and those discussions will be ongoing,” Granholm said.

She said she was pleased that no one was cut off from Medicaid, that revenue sharing was not cut, that there is an increase in the program allowing senior citizens to stay in their homes, and that the K-12 budget includes $20 million to start to look at the disparity between school districts to begin to have equal funding.

She also was pleased with a $35 million expansion of the child protective services program in the Department of Human Services and an agreement to expand nurse training programs by using higher matching funds from hospitals to attract more federal funds. She said no state employees will lose their jobs as a result of privatization.

Emerson said aside from relatively minor vetoes in some areas, the DHS budget has an issue that is either an error or a mistake in drafting that will need clarification from the Senate and House fiscal agencies before deciding whether a veto is warranted.

One lingering hole in the budget are the fees in the Department of Natural Resources hunting and fishing programs and fees in the Department of Environmental Quality, but Mr. Emerson said he gets “assurances from legislators all the time” that they will act. He said he urged department directors not to issue layoff notices to employees until the Legislature has a chance to meet the January 15 deadline set in the budget.

No public statements were expected from the executive office on the final nature of the budget, with work expected to continue into the night to review the bills. The last of the bills hit her desk at 10:30 a.m. Wednesday.

TUITION GRANTS: After proposing once again to eliminate tuition grants to private college students, and threatening to veto the $58 million program during the latter stages of negotiations, Granholm said she would not veto the money. She did not offer an explanation, issuing a simple “no” response to the question of a possible veto.

House Appropriations Chair Rep. George Cushingberry Jr. (D-Detroit) had predicted Friday the Legislature would override a veto if one were issued.

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