A late-night vote in the Michigan House puts a possible income tax increase and a possible expansion of the sales tax in the hands of the Senate.
House Speaker Andy Dillon says both sides are moving toward a deal.
"I'm very encouraged by the progress we've made today and I expect you'll see more progress every day," Dillon (D-Redford Twp.) said.
And more progress will be needed because it's far from a done deal. The income tax and sales tax bills do not include any new rates. Those numbers will likely be negotiated in the coming days and would be presented in the Senate bill Sunday.
The House's move is still a critical step, though, because the Senate has to wait five days to vote on any tax increase passed by the House.
So with a government shutdown looming October 1st, any action -- even if it comes without new tax rates -- makes that shutdown less likely.
Gov. Jennifer Granholm spent part of Tuesday advocating for new taxes as part of a budget solution. Flanked by health care workers, the governor said Medicaid reimbursements would be reduced under a cuts-only budget.
That move could lead doctors to refuse Medicaid patients, ultimately adding to the overcrowding problem in hospital emergency removes.
For its part, the Senate passed reform measures that could save money in the long term. And although he says he wants to see some cuts first, even Senate Majority Leader Mike Bishop put forth a budget plan that included a higher income tax rate.
"We did that in the spirit of bipartisanship to end this shortfall," Bishop (R-Rochester) said. "Our responsibility now is to come up with reasonable, rational and quick outcome."
At the end of the meeting with reporters, Bishop said the Senate is ready to vote on Sunday if necessary.
So while procedure stands in the way, there is evidence of movement toward a deal that could include an income tax increase and a sales tax expansion.
Details of such a deal will likely emerge Sunday if one isn't announced before then.