LANSING ? A Michigan income tax increase would cost the average family $1.33 a week, Gov. Jennifer Granholm said, but that amount would keep the state from gutting social services, public safety and education in Michigan. She also said the state can only afford to cut “a bit more” than $300 million from the upcoming budget.

As debates go on over finding a solution to the 2007-08 budget, Granholm told reporters that officials had to remember the debate is not really over tax hikes or spending cuts but the state’s quality of life.

“What this debate is about is not 4.6 percent or 4.4 percent. This is about who we are as a state,” Granholm said.

Nevertheless, a tax increase is a critical part of a budget solution, Granholm said.

If the Legislature cannot come to an agreement over an income tax increase, then a proposal to close so-called business loopholes in taxes would be an option instead, she said.

At a hastily-called press conference in the Governor’s conference room with a number of health care officials, Granholm said not just health care would be affected if budget cuts on the level that some Republicans have called for are enacted. Public safety and education would also suffer, she said.

She rejected the idea that the $1.75 billion to $1.8 billion estimated revenue shortfall for the 2007-08 budget could be solved by a proposal the raised half in new taxes and cut the rest. The state has cut the budget by billions over the years, she said, and to cut it much more would drastically affect services to the state’s poorest.

“Do we really want the state to pull out the rug from under grandparents who need health care while they’re caring for foster children?” she said.

Granholm also said that any legislator – Democrat or Republican – who refuses to vote on a tax proposal is putting their political career ahead of the needs of the state.

She praised “practical Republicans” who are trying to come to the center and reach a compromise on budget and tax issues, and urged Republican leaders not to block those legislators from voting their conscience on the issue.

Granholm said she was encouraged by the “shuttle diplomacy” underway between lawmakers and administration officials to reach an agreement, but the time grows ever shorter before the state faces the possibility of a shutdown. Effectively, she said, lawmakers have nine days to complete work to ensure that state payments are not interrupted.

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