F.Y. '10 MINUS 30: OFFICIALS TO HOLD 'MARATHON' SESSION

Governor Jennifer Granholm and top legislative leaders will hold their longest negotiating session so far on Thursday in an effort to break the stalemate on a budget deal for the 2009-10 fiscal year - and they'll have guests.

Joining Ms. Granholm and the Legislative Quadrant will be some well-known players from the legal, business and political worlds, such as Bill Rustem, president of Public Sector Consultants, Matt Cullen, a former General Motors Corporation executive now heading up Rock Enterprises, an umbrella of entities run by Quicken Loans founder Dan Gilbert; and F. Thomas Lewand, a Detroit attorney and powerbroker who was chief of staff to Governor James Blanchard.

Granholm press secretary Liz Boyd declined to comment when asked about the addition of these individuals to the meeting or the reasons for meeting for an extended period.

A spokesperson for House Speaker Andy Dillon (D-Redford Twp.) said the leaders would meet from 9 a.m. to 9 p.m. with a break only so he could present his health insurance pooling plan to a House committee (see related story).

"Discussions have been underway between the governor and the legislative leaders on the budget all summer, and those discussions are ongoing," Ms. Boyd said.

On Tuesday, Mr. Dillon said officials continue to grapple with what to do when federal stimulus dollars numbering in the billions run out in the 2010-11 budget. He said he thought an agreement was close.

To Mr. Dillon's comment that the leaders are growing close to an agreement on the budget, Ms. Boyd said that Ms. Granholm "has made no secret of the fact that a two-year budget agreement presents challenges. Getting an agreement on 2010 is one thing, getting an agreement on 2011 is another and they are not there yet."

Nonetheless, she said the administration remained confident agreements would be found before the October 1 start of the 2009-10 fiscal year.

Matt Marsden, spokesperson for Senate Majority Leader Mike Bishop (R-Rochester), said Mr. Bishop is willing to listen to any ideas the business and political leaders have to offer, but rejected the idea of letting them moderate or assist in brokering a budget deal.

"They don't need to have it mediated," he said. "It's not appropriate. No budget discussions will be going on with outside folks."

Mr. Bishop has informed Ms. Granholm he will attend, but Mr. Marsden said Mr. Bishop wants to hear a concrete proposal from the governor and Mr. Dillon. Past meetings have featured nothing more than trial balloons, said Mr. Marsden, who labeled the meeting "the governor's idea."

"If the Democrats are coming with a legitimate legislative proposal as to how to try to resolve this, then we can have a conversation," he said. "If the conversation is productive, he'll sit until the cows come home."

On Wednesday, House Democrats are slated to sojourn to the Radisson in downtown Lansing to hear what leadership is proposing in terms of balancing the budget.

Approving slot machines at horse race tracks, commonly referred to as racinos, has been kicked around but that would not be a short-term solution to the budget deficit because voters would have to approve such a move, Mr. Dillon said.

Adopting a new Lottery pull tab system is also in the mix, although the governor's counsel has concerns about the measure. Mr. Dillon said he is asking the caucus' legal counsel to look into the issue more.

Budget cuts will likely be a part of the final solution, but Mr. Dillon said there are three areas officials still disagree on in terms of reductions: revenue sharing for local governments, the Promise Grant for college students and medical services in the Department of Community Health budget.

Senate Republicans have proposed steep cuts in all three categories, including completely eliminating the $140 million Promise Grant.

Mr. Dillon said his caucus can't support elimination of the grant program, but using a means test could be one way to reduce costs. He said others are supporting a pro-rata approach to the grant.

Tax reforms are still part of the discussion, he said, but enacting a major change is growing less likely. Mr. Dillon said he is waiting to see whether Detroit Renaissance will form a coalition that would push for specific changes.

Mr. Marsden said Mr. Dillon's objections to the Senate cuts are fine, but wanted to know what he offers as an alternative.

"What is it you want to do?" he asked. "Are you planning on cutting further and then replacing that revenue (to those programs)? Or are you proposing revenues? And if you're proposing revenues, what are they? Concretely, what are they?"

Meanwhile, the Detroit Regional Chamber released a statement urging Ms. Granholm and the Legislature not to raise taxes. It has called for reducing the prison population and making other structural reforms to save money.

"Leadership in the Legislature and the Governor's office should be having a frank conversation about the appropriate functions of state government and how to pay for it," said Richard Blouse Jr., president and CEO of the Detroit Chamber. "We strongly encourage all parties to continue productive discussions that will result in a balanced budget that doesn't ask more of taxpayers and includes statutory changes that will result in real, long-term, structural reform that will help our state and revitalize Michigan for the future."