By By ANDY HAMILTON / Niles Daily Star
NILES – With a $3 billion shortfall facing the state, Gov. Jennifer Granholm said Tuesday night her plan for revitalizing Michigan's economy was "a mix of solutions – cuts, reform and revenues."
Granholm delivered her fifth State of the State Address in front of a joint session of the Michigan legislature. Though the budget will not be released until Thursday, the governor said cuts alone would not save the economy, but instead would destroy the state's ability to recover.
"Again this year, my budget will call for hundreds of millions of dollars in spending cuts, many of them painful. But those cuts are necessary to be able to afford the investment that will grow our economy," Granholm said.
To diversify the economy, Granholm urged the state to put an emphasis on alternative energy. The state will do so, she said, by drawing to Michigan new solar and wind energy companies by expanding alternative energy renaissance zones, investing $100 million in the public and private sector in the next three years to attract alternative energy companies, requiring in eight years at least 10 percent of Michigan's energy to come from renewable sources, and by next year having 1,000 ethanol and bio-diesel pumps at gas stations across the state.
"In the 21st century, Michigan can be the state that breaks our nation's dependence on foreign oil," Granholm said.
Other plans she encouraged lawmakers to pursue included requiring students to stay in school until age 18, giving displaced workers a free community college education in a high demand field and passing her plan to provide small business employees with 401(k) plans.
Sen. Ron Jelinek, R-Three Oaks, said he was glad to hear the governor refuse to cut public school funding, but questioned how Granholm plans to pay for the new educational opportunities she presented. The governor presented a lot of exciting ideas, he said, adding, "My concern is how we're going to pay for that."
Jelinek said the legislature is working on plans to replace the nearly $2 billion of revenue generated by the Single Business Tax that lawmakers voted to end early. He also said once the Single Business Tax is replaced that the $3 billion hole the governor refers to will be closer to a $1 billion shortfall.
"There are several plans out there and obviously we're going to have to adopt one or a mixture of a several of them," Jelinek said.
Rep. Neal Nitz, R-Baroda, stated in a press release, "We need to look at ways to increase job growth. Michigan has been heavily reliant on the auto industry for decades, but now we need to look at ways to diversify our economy and not only create jobs but attract different types of companies.
Nitz dismissed raising taxes as a way to solve the state's budget crisis.
"We need to work with the governor to get Michigan back on track without increasing the burden on Michigan residents," he said.
Jelinek said the budget is presented Thursday to appropriations committees in both the Senate and House. The branches then divide the budget work and trade again in March, and sometime in the end of May both the House and Senate will have an idea of what funds the state has.