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

"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

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."