LANSING - Now that a temporary budget deal has been struck and a protracted partial shutdown of government avoided, Michigan lawmakers have 30 days to work out the specifics of the state's overall spending plan for the new fiscal year.
The debate started before the sun rose yesterday, soon after lawmakers passed the final bills needed to secure an emergency budget extension and end a four-hour partial government shutdown.

Michigan citizens will face the largest tax increase since the 1980s, a combination of a higher income tax rate and an expansion of the sales tax to cover some services. State Treasurer Robert Kleine said Michigan taxpayers will pay just over 11 percent of their personal income on state and local taxes, up from just under 11 percent before.

But the deal also includes around $440 million in savings through cuts and spending restrictions.

"Whenever somebody's cut, they don't like it," Democratic Gov. Jennifer Granholm said at a yesterday afternoon press conference. "These cuts will be difficult. But they must be done."

Universities and community colleges thought they would see an increase under the budget deal. But a press release from Granholm's office said planned funding increases for higher education will be eliminated. Earlier this year, Granholm had proposed a 2.5 percent funding increase for universities.

The institutions should get payments this month that were delayed from the last fiscal year, according to Greg Bird, a spokesman for Democratic House Speaker Andy Dillon.

The Legislature still has to act on the budget plan, and it's likely universities will argue they should get some sort of funding increase.

"I will be very disappointed if there's not some type of an increase for higher education," said Mike Boulus of the Presidents Council, an organization representing Michigan's public universities. "We haven't seen an increase in years."

Cynthia Wilbanks, the University of Michigan's vice president for government relations, said she doesn't anticipate any changes that will affect tuition.

"I think it's pretty close to what we assumed," she said. "Of course, everything is open to change these days."

She said she doesn't the 2.5 percent increase in higher education appropriations will pass, but she is hoping for at least a slight change.

"I'm optimistic that there might be a modest increase," she said.

Reduced state funding contributed to average tuition increases of roughly 10 percent at Michigan's 15 public universities this fall.

Local K-12 education may get a 1 percent funding increase, not enough to cover inflation or give relief from five years of stagnant or reduced funding. Both Democrats and Republicans say they would like to spend more on education, but the best they might be able to do is hold funding relatively steady. Granholm originally had proposed at least twice that much.

"We don't have the same state we used to have. Present revenues are not there," said Senate Majority Leader Mike Bishop (R--Rochester). "You have to identify your priorities and be able to fund them as we can."

The $440 million in cuts or the elimination of planned spending increases are being used along with the income tax increase and new sales tax on services to erase a $1.75 billion shortfall the state would have faced without the changes.

-Emily Barton and The Associated Press contributed to this report.