Governor, Legislature Reach Budget Deal

Gov. Granholm and the state legislature have agreed on a budget deal that delays next year's income tax reduction and cuts spending another $12 million.

On Thursday, the House voted 64-46 to approve the bill. Tuesday night, the House had come up 11 votes short of the 56 needed to approve the income tax delay, but the deal was sealed when the governor agreed to additional cuts. Those cuts will reduce administrative spending by $10 million and cut funding for adult education in the Corrections Department by $2 million.

The state income tax will drop from four-percent to 3.9-percent on July 1 instead of Jan. 1.