House Republicans said there is ample administrative fat to be cut, but Ms. Lannoye said those cuts have been made over the last several years, pointing to employee concessions, a much smaller state workforce, travel restrictions, supply restrictions, among others.   "I think the administrative piece has taken their fair share," she said.

Rep. Leon Drolet (R-Clinton Township) said there are two key differences between House and Senate Republicans to explain the disagreement.

"Number one, we have a particularly conservative caucus.   Number two, we have to face the voters every two years," he said, noting the Senate is up for election only every four years.   "We have to be prepared at any time to defend the decision we might make."

Seven House Republicans joined all 12 House Appropriations Democrats to adopt the executive order: Reps. Bruce Caswell of Hillsdale, John Moolenaar of Midland, Mike Pumford of Newaygo, Mr. Shackleton, Rick Shaffer of Three Rivers, John Stewart of Plymouth and Howard Walker of Traverse City.

EYES TURN TO MICHIGAN HOUSE WITH SENATE APPROVAL OF TAX PAUSE

With stronger than expected support by Senate Republicans, legislation to delay by six months the rollback of Michigan's income tax rate to 3.9 percent by six months now goes to the House where approval remains uncertain and where action on SB 852 could take place on Tuesday.

But Senate Republicans who voted for the delay said House Republicans should follow because the proposal, which raises $77 million for the current fiscal year, is good for the state.   The eight Republicans who voted for SB 852, which passed 24-14, and the unanimous support for the executive order by the Senate Appropriations Committee should signal Republicans in the House that the tax and budget cutting package is a fair proposal for the state, they said.

"I don't want our state to turn into Mississippi," said Senate Appropriations Committee Chair Shirley Johnson (R-Royal Oak).   The package is needed because of the structural fiscal problems the state faces, and because "I'm proud of the programs and the services we provide," Ms. Johnson said.

Clearly, the pressure is mounting on House members on the proposal and from both sides on the question with the meetings State Republican Chair Betsy DeVos held with House Appropriations Committee Chair Marc Shulman (R-West Bloomfield) and Tax Policy Committee Chair Lorence Wenke (R-Richland) showed (see related story).

House Speaker Rick Johnson (R-LeRoy) publicly pledged for the first time late Wednesday to allow a House vote although he declined to say what his position is.

And the Michigan Republicans sent out an e-mail alert to members with all the House Republican members' office telephone numbers and e-mail addresses, urging them to contact the lawmakers.   "Tax-funded lobbyists have made their opinions heard on this and not surprisingly they favor a tax hike," the e-mail says.

Jeff Stormo, spokesperson for the Republican Party, said Ms. DeVos was speaking to some GOP legislators to give them encouragement that they are doing the right thing by holding the line on the income tax rollback.

Asked if he would talk to House members about the bill, Senate Majority Leader Ken Sikkema (R-Wyoming) told reporters he was willing to talk to people about the proposal and how the proposal was developed because "it's a good, fair compromise for the people of Michigan."

The "vast majority" of state residents would agree to the proposal, Mr. Sikkema said, because a tax cut-although delayed-is still coming July 1.   Additionally, he said it minimizes the cut on state schools and social services and provides an additional tax cut in the single business tax as well as provides a greater incentive for companies to provide health insurance to their workers.

But House members also have to remember, Mr. Sikkema said, "You didn't get elected to make risk-free decisions.

"It's not perfect, but don't let perfect get in the way of good, and don't let good get in the way of doable," Mr. Sikkema said.

Governor Jennifer Granholm was pleased with the Senate action, said her spokesperson, Liz Boyd.

"It's been a good week, with Senator Sikkema and the governor reaching their agreement and the fact the governor's budget proposal is moving, and we think ultimately will be approved by the House," Ms. Boyd said.

Not all of Mr. Sikkema's fellow caucus members concurred in his sentiments.   Sen. Alan Cropsey (R-DeWitt) said more cuts could be made to the budget instead of having to delay the income tax cut.   "This is a tax cut the people were promised," he said.

And Sen. Nancy Cassis (R-Novi) said the tax pause and budget solution is a "shuffle and shift," and a "Band-Aid, not a cure" to the state's fiscal problems.

Republicans Valde Garcia of Howell, Tom George of Portage, Mike Goschka of Brant, Bev Hammerstrom of Temperance, Ron Jelinek of Three Rivers and Wayne Kuipers of Holland joined Mr. Sikkema and Ms. Johnson and all 16 members of the Senate Democratic caucus to approve the bill.

The Senate also gave the measure immediate effect, a move the chamber typically does not take until a bill is returned from the House and which would allow the bill to be immediately enrolled without further Senate action if the House passes it without changes.

The bill simply delays the now scheduled January 1 rollback of the current 4 percent income tax rate to 3.9 percent back to July 1.   The action should raise approximately $77 million, and the revenue from was split between funds for K-12 school aid, higher education and local government revenue sharing.

After the Senate approved the bill, the Senate Finance Committee approved legislation that would enact the two years of the phase down in the health care cost provisions in the single business tax (see related story).

COLLEGES, UNIVERSITIES CHIDE APPROACH TO REDUCTIONS

Universities and community colleges would be cut by 5 percent if they increase tuition by more than the inflation rate under the reductions unveiled Wednesday by Governor Jennifer Granholm.

If schools keep tuition hikes to the 1.7 percent inflation rate set by the Detroit consumer price index, Ms. Granholm promised to restore 3 percent of their cuts in the middle of next year.   The tuition restraint requirement would apply to both the current and 2004-05 academic years.

"The governor thought it important to have something that encourages universities to restrain tuition," Budget Director Mary Lannoye said.

But officials representing the state's 15 public universities and 28 community colleges said few, if any, of their schools would be able to hold tuition raises to 1.7 percent.

"A 1.7 percent tuition increase?   I don't think that's very reasonable to ask," said Mike Boulus, executive director of the Presidents Council State Universities of Michigan.  

Universities will have to plan for a 5 percent cut, and they hold little hope of receiving back 3 percent of the cut given the three-year track record of reductions to universities.

Tom Bernthal of the Michigan Community College Association said some colleges would meet the 1.7 percent threshold, but the "vast majority" would not.

"That tuition restraint business is just absurd," he said.   "It's rather cynical to put forth a budget reduction mechanism which they're really counting on colleges and universities not to be eligible for."

But Mr. Bernthal praised the restoration of parity between colleges and universities.   Colleges were upset by the July budget deal, which allocated an extra $1.8 million to some universities.   Under the executive order, colleges would be cut by 4.38 percent-$1.8 million less than what a 5 percent cut would represent.

Rep. Sandy Caul (R-Mount Pleasant), chair of the House Appropriations Subcommittee on Higher Education, criticized the repeated use of university funds to shore up the budget.   Universities saw a 3 percent cut during the 2002-03 fiscal year and already were cut by 6.74 percent for the 2003-04 year.

"It's just really unfair that we go back to higher education," she said.   "I feel they've paid their fair share."

K-12 BUDGET:   The proposed pause in the income tax is one of the largest factors, but only one of a half dozen items that are being used to make the cut in state aid to schools about half as bad as had been projected, with districts expecting to see the benefits by January if the package is approved.

Under the tenuous agreement, which does not yet have the support of House Republicans, the cut in school aid would amount to no more than $100 per pupil, though the precise determination depends on some factors yet to be settled.

In addition to the $45.6 million schools would gain by a six-month pause in cutting the income tax, other sources of revenue are: $28.6 million by stepped up tax enforcement that will require approval by the Legislature of $8 million in a supplemental budget bill for more Department of Treasury auditors, $20 million in a personal property tax amnesty program which will require passage of legislation (meanwhile $11.5 million in lower personal property tax revenue is factored in due to tax audits), $10 million from improved Lottery sales, and about $59.7 million in money lapsed from the last fiscal year.

The $22 million appropriated for the laptop computer program would not be spent this year, with that money lapsing back to the school aid fund.

That leaves a projected deficit of up to $178 million, which would be erased with the new proration per pupil cut.

Despite the improved outlook for numbers that initially prompted the Granholm administration to notify schools of a $196 per pupil cut with their December 20 payment, the state is not modifying that reduction. Budget spokesperson Greg Bird said the figures cannot be confirmed until the state officially closes the books on the 2002-03 year by the end of December.

The new reductions would be applied to the state's last eight payments this fiscal year to districts.

Taken off the table by leaders was any cut in the $55.6 million the state appropriates to prevent reductions in operational budgets for the wealthiest districts.

School groups said the agreement provides them with some measure of relief given the cuts districts were facing.

Michael Flanagan, executive director of the Michigan Association of School Administrators, said, "I appreciate the governor's courage in introducing the full pause (for one year) though I'm disappointed it didn't happen.   I also appreciate that Senator Sikkema introduced a half-year pause and having the cut reduced by $100 is great for our kids."

PRISONERS BEAR MUCH OF THE AGENCY CUTS: Prisons took the largest cut of all the state agencies in Governor Jennifer Granholm's budget-cutting executive order announced Wednesday.

Reductions to the Michigan State Police also were high relative to other agencies although the figures are somewhat misleading because much of the lost general fund revenue would be made up for with other monies.

The Department of Corrections would take $18.9 million in cuts (only a 1.1 percent cut from 2003-04 levels), but that represents 22.9 percent of the $82.5 million in cuts to state agencies.

"I think Corrections is probably the department that was hit hardest," said Greg Bird, State Budget Office spokesperson.

But Mr. Bird also noted that Corrections was one of the few departments that actually received an increase for 2003-04 above 2002-03 funding.

Many of the cuts come from leaving open vacancies that Corrections had hoped to fill.   The department also would find $2.25 million in savings from psychiatric services although Mr. Bird said these savings would be achieved through efficiencies and would not affect actual services.

Another $700,000 would be sliced from hospital and specialty care services and $750,000 from clinical complexes for the southeastern and southwestern regions.   Cuts totaling hundreds of thousands would be made to the actual prisons.   And $7.3 million in capacity enhancements would be eliminated.

A phone message left with the Michigan Corrections Organization, the union for Corrections employees, was not returned.

With reductions in the State Police's uniform services ($1.94 million), the department's vehicle fleet by $700,000, laboratory operations by $291,500, fire marshal programs by $176,500 and criminal investigations by $600,000 and a delay in the school expected to train 100 new troopers ($8.6 million), cuts to the State Police also represented a considerable portion of the agency cuts.

But a sizeable chunk of those general fund cuts would be restored from other revenues, namely slashing the state's grants for driver's education programs by $6.1 million.   Those revenues would be used to keep the trooper school.

HEALTH CARE, WELFARE RELATIVELY PROTECTED: Executive orders in recent years have generally been especially tough on the Department of Community Health's programs, but Ms. Granholm largely spared the biggest noneducation budget from cuts in her Wednesday executive order.

Cuts to Community Health total just $5.1 million.   Considering the $2.6 billion in general funds the department receives, that's a less than 0.2 percent cut.

"It was the governor's intent to protect the most vulnerable, and that's what you see reflected here," said Greg Bird, State Budget Office spokesperson.

At the Department of Human Services, the most notable cut is $11 million to day programs for welfare recipients, but that constitutes a relatively small portion of the entire program.

Sharon Peters of Michigan's Children said this executive order protected some critical programs, especially those for early childhood education.   "All in all in the issues we're concerned about ... it seems to me they've done their best to protect vital services for our most vulnerable kids," she said.

But Ms. Peters also said the fiscal year 2005 budget Ms. Granholm will present in February must include new revenues.   "Rather than just celebrating that they weren't cut further, we need to get to the point where we can restore some of the devastating cuts (from past years)."

The Michigan Catholic Conference praised the budget for protecting those most in need.   "The Executive Order that passed today takes the morally responsible steps toward protecting our state's most vulnerable citizens," said Paul Long of the group.   "It is now our sincere hope that this sense of moral responsibility continues to resonate until the budget is finalized."

REVENUE SHARING: The state's latest budget blow to local governments would be better under the pending agreement than officials had been expecting because of help provided by a portion of the revenues gained from delaying the income tax cut.

Still, it means some 250 townships and 30 villages will no longer receive revenue sharing funds under the statutory formula.

Officials representing both municipalities and townships said the new cuts will be quickly seen in reduced services by local governments.

Mike Brady of the Michigan Municipal League said the group appreciates the better outlook due to the revenues from the delayed tax cut, but said most of his members will see cuts of about 5.2 percent.

"It's definitely going to hurt.   We will see a lot of cutbacks around state, but which services are affected will depend on the community," he said.   "Some already do not do holiday lights, some have wiped out capital projects and now it will be other stuff like police and firefighters."

David Bertram of the Michigan Townships Association said it is a concern that a significant number of townships will no longer get statutory revenue sharing, but added, "It's 5 percent, but that is a little better than it was 48 hours ago."   He said townships were already dealing with the 3 percent cut implemented earlier this year and automatic reductions of 4.2 percent due to falling revenue from sales taxes.

He said the townships affected by the loss of all state aid show no identifiable pattern and are scattered across the state.

ATTORNEY GENERAL: The $750,000 cut to the Attorney General's office will likely mean more layoffs (though not yet determined) which will translate into slower service by the state's chief legal representative, said spokesperson Matt Davis.   He noted the department's budget is heavily devoted to personnel costs with little else to cut but said the new round of cuts is something the agency will have to deal with.