LANSING – Negotiations between Gov. Jennifer Granholm and Senate leaders are underway in what has been described as difficult, but potentially promising discussions to find a resolution to Michigan’s fiscal crisis.

That was just one development as Michigan is now less that one week from the potential of having no budget and being forced into at least a partial government shutdown.

Among other items taking place as the state struggles to avoid the shutdown:

Sen. Valde Garcia (R-Howell) outlined his proposal for a alternative solution to Senate Republicans, and the caucus rejected it. However, some officials have said it may still be an option for lawmakers to consider if no other solution is reached.

Economist Pat Anderson is convening a group of governmental experts, though none are now in the government, to discuss how the state could continue operating even if there is no budget.

Sources said that Granholm and Senate Majority Leader Mike Bishop (R-Rochester) were in discussions through the day Monday working on a potential solution. Granholm apparently told Senate Minority Leader Mark Schauer (D-Battle Creek) that the talks would be “very tough negotiations.”

Bishop also apparently discussed with his caucus the fact that he is in negotiations, though sources did not know if he had outlined any of the issues in the discussions.

Though it comes so late in the process, the fact that the state’s top officials are themselves talking face to face on the budget was comforting to some sources that a solution may finally be reached.

Senate Republican staff were apparently shuffling papers with a variety of numbers and facts into the discussions with Granholm, sources said.

Technically, some authority has to be issued by Thursday for the state to continue making payments as the new fiscal year begins.

Meanwhile, Garcia is refusing to release details of his alternative proposal out of deference to his caucus, which rejected the plan.

Sources who had some knowledge of what Garcia was initially proposing as part of his budget solution said that it likely involved a combination of an income tax increase as well as a sales tax on some services.

Outside of government, however, economist and former state official Patrick Anderson has called for a number of individuals to meet in his East Lansing offices on Tuesday to discuss how the state could continue to operate without a budget.

He refused to name who would attend the meeting, which will not be open to the public, but said the agenda will look at what overall authority the state would have to operate without a budget, how to avoid chaos in such a situation, and how the state could continue to make payments and provide police power in case there is a shutdown.

The group is advisory only, Anderson said. It has no authority to act for the state nor was it requested by the state, but he said he hoped it would be able to provide some guidance to the state should all efforts to reach a budget fail.

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