LANSING – Gov. Jennifer Granholm’s budget proposal will be released to the public on Thursday, but top legislators and other officials have started to get a glimpse at what is being called “a grim” budget document.

A spokesperson for Granholm said the administration will not outline any aspects of the budget before Thursday’s presentation. But Liz Boyd said the administration has said all along that the budget outlined will be “painful” and that whatever the state gets from the federal stimulus package will not be used to balance the budget.

Sources, all of whom spoke on background, said every budget area will see cuts, but the administration is not planning on across the board cuts, sources said, so some areas will see smaller cuts than others. Administration sources have already indicated that universities and colleges will see smaller overall cuts than other areas. But because the state faces an anticipated $1.4 billion in lowered general fund revenues, no area will be spared from cuts, sources said.

Complicating the budget is the anticipated federal funds the state will get in a stimulus bill that is now in ongoing congressional debate. How much money the state could receive and in what areas is uncertain, since the proposal now under debate in the U.S. Senate would allocate less money to the individual states than would the bill that passed the U.S. House several weeks ago.

Officials working with the National Governors Association and the National Conference of State Legislatures has said the U.S. Senate version of the stimulus bill now under debate could mean more than $1 billion less to Michigan than the House version.

Sources said the administration is not likely to work any anticipated federal money into the budget presentation because it is clear that will be unsettled on Thursday.

There is a hope that federal funding will help the state ease into the major restructuring that Granholm called for last week in her State of the State address. In that address she called for shrinking the number of departments from the current 18 to eight.

But she also warned the stimulus bill will not be used to expand state government.

For examples, sources said that administration officials have told health care professionals that they should not expect any increase in Medicaid patient care reimbursements even with a large anticipated federal stimulus payment for Medicaid.

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