Governor Granholm's first plan to fix the state budget has been laid to rest.
"The Appropriations Committee today voted to reject the executive order," says State Senate Majority Leader Mike Bishop (R).
A two-penny sales tax on services-- intended to generate $1.5 billion-- was at the crux of that executive order. But Bishop says it missed the mark.
"Citizens of the state are overwhelmed right now, businesses are overwhelmed right now-- it seems to me extraordinarily irresponsible for the government to look at taxes," he says. "We need dramatic cuts right now."
It's now up to the Republicans to decide where those cuts should be. Right now, they admit they have no firm alternative. Democrats worry the GOP will propose cutting school funding.
"We need to put education as our top priority," says Senate Minority Leader Mark Schauer (D). "Rejecting this executive order doesn't do that."
The plan was created in part to salvage school funding, which could take a major hit due to the state's $900 million deficit. The Governor promised in her State of the State address not to cut education spending mid-year.
"They've put at risk deep cuts," Schauer says, "or funding for our schools that results in deep cuts."
"To cut us now would have devastating effects," says Tom White, Executive Director of the Michigan School Business Officials. "For schools, the problem is immediate. This is the most dire situation I've seen in 20 years in my job with education funding."
Senator Bishop says the plan isn't necessarily to cut schools, but he won't make any promises.
"Our position has always been: You need to make cuts before we think of taxes."
But with Governor Granholm's plan gone, and no "Plan B" to fall back on, schools will have to wait even longer to find out their financial fate.