LANSING – Having a statewide referendum on a revenue proposal may be the right way to go Michigan to resolve its revenue problems, Gov. Jennifer Granholm said Tuesday, but she did not endorse any sort of specific ballot proposal.

Speaking to reporters following another meeting with local education officials, this time with Ingham County school executives and parents in Mason, Granholm repeated her call for the public to pressure the Legislature to act on revenues to offset the budget cuts enacted, especially those that would affect schools.

Voting for “narrowly targeted” revenue increases should be “a no-brainer” for lawmakers, especially the Senate, Granholm said.

Taking care of the short-term financial problems, however, does not mean the state will solve its long-term funding issues especially for schools, she said. Granholm said the state needed to develop a new long-term funding system for education.

Granholm also spoke after several hundred people rallied outside the Capitol calling for the state to restore funding for schools.

But she also acknowledged that to this point there has not been the groundswell of public opposition to the budget cuts that she has called for in numerous meetings with school officials and others across the state. Saying she wasn’t sure why that was, Ms. Granholm also said that the public would begin to recognize the effects of the budget cuts not just on schools but on other public services.

At the meeting with Ingham County school officials, a number of individuals called for the state to hold a plebiscite on a revenue proposal that could help boost revenues to the state. Among the ideas suggested were extending the sales tax to services and lowering the rate from the current 6 percent to 5 percent and amending the constitution to allow for a graduated income tax.

While throwing some support to the idea of a statewide vote, which could help resolve long-term financial problems affecting schools, Granholm did not endorse any specific proposal to go before the public.

Each proposal would have to be researched on what could be acceptable to the voters, she said. The current system is no longer acceptable.

And she said if lawmakers refuse to enact some of the tax proposals she has called for, which include taxing all tobacco products on the same basis as cigarettes and trimming some business tax credits, that implies legislators care more about the oil and tobacco industries than they do for schools, she said.

Senate Majority Leader Mike Bishop (R-Rochester) said he has urged Granholm to cease her “road shows” where she has met with local school officials.

“As a leader of this state, she has a responsibility to bring calm and stability to the state,” he said.

Bishop had said last week that Senate Republicans were determining if they could assemble a proposal that would satisfy House Democrats and Granholm to restore some of the lost K-12 funding.

But Tuesday, it appeared Senate Republicans have decided to stick with their plan to pump $100 million into K-12 schools and phase out the Michigan Business Tax surcharge by delaying a scheduled increase in the Earned Income Tax Credit (HB 4514 ) and curbing other tax exemptions.

The Granholm administration has said that reducing the scheduled boost in the Earned Income Tax Credit could jeopardize federal welfare funds, but Bishop cited a Senate Fiscal Agency analysis saying the state could claim some university funding toward federal requirements, as well as other state spending.

“We’ve got $309 million of tax expenditure savings that we’ve sent over to the House,” he said.

Bishop called Budget Director Bob Emerson’s analysis of the federal funding ramifications of using the Earned Income Tax Credit money “an absurd argument and one that is not based in reality.”

Bishop also made clear his opposition to the House plan to spend $184 million in federal stimulus funds to reduce the $127 proration K-12 cut ordered by Granholm to $10, calling the plan “exceptionally bad.”

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

a>>