LANSING -- State government was officially shut down after midnight, as state lawmakers failed to agree on either a full or temporary budget for the new fiscal year.
The Republican-controlled Senate held final action on an interim budget until after the midnight deadline, over objections from Gov. Jennifer Granholm, who accused them of shirking their responsibility to keep state government from shutting down.
The Senate adjourned until 12:15 a.m., when it was presumed negotiations would continue between the House, Senate and Granholm.
Less than an hour earlier, Senate Majority Leader Mike Bishop, R-Rochester, accused Granholm and Senate Democrats of sabotaging progress on a final budget agreement, although key budget bills remained stalled in the Democratic controlled House.
Wednesday afternoon, Granholm notified some 51,000 state employees that they would be laid off at 12:01 a.m. if no budget was in place.
Only state workers for essential services would be at work, such as prison employees, unemployment offices, State Police patrols and state hospitals and critical health programs.
The closure also means state vendors will not be paid.
If there is no resolution by later in the morning, people camping in state parks will be asked to leave.
Lt. Gov. John Cherry, who presided over the Senate, said, "It's unfortunate it's gotten to this point. Both houses passed continuation budgets, but unfortunately they haven't sent it to the governor's desk so she can sign it.
Cherry said some may have been looking toward an actual government shut down. He added, "Maybe now that it's happened a resolution can be reached."
Two key bills -- one to fund public schools, the other to pay for state government and revenue sharing to local communities -- remained mired in the House with not enough support.
Just before midnight a bill to reduce state aid to schools by $218 per pupil was defeated, 2-106, as the Michigan Education Association engaged an all-out lobbying effort to kill the bill.
"Our goal is to find the money to run our schools," said MEA executive director Lu Battaglieri.
House Democratic leaders vowed throughout Wednesday to pursue legislation to raise more revenue, and use the money to restore some cuts such as aid to schools, the Michigan Promise grant program for college students revenue sharing and Medicaid payments to physicians and hospitals.
A bill to fund public universities would eliminate the Michigan Promise grant program, which was to pay up to $4,000 to eligible college students this school year.
Another bill that stalled in the House would reduce revenue sharing to cities, townships and villages by 11%. House Speaker Andy Dillon, D-Redford Township, couldn't muster enough of his own House Democrats to pass the bill.
Dillon had said he had an agreement with Senate Republicans to balance the budget using spending cuts. Dillon also planned to pursue unspecified taxes to restore programs.
Among the taxes discussed were a 3% assessment on all physicians, a tax on bottled water and a sales tax on tickets for entertainment such as sports events and concerts.
The state House of Representatives barely passed the budget that provides payments to local units of government for everything from police and fire services to maintaining parks and libraries.
The 56-52 vote was enough to pass revenue sharing, which includes an 11.1% cut in payments to municipalities, as well as a $7.1 million allocation for the Michigan State Fair.
The vote came 75 minutes past the midnight deadline to approve a state budget.
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