LANSING (AP) - The Michigan Senate approved a plan yesterday to cut business taxes by $1 billion over six years and tie the potential for even more tax relief to limits on state spending.

Over Democratic objections, the Republican-controlled Senate sent the legislation to the state House, where Republicans passed their own tax package in August.

One bill would reduce the state's main business tax rate from 1.9 percent to 1.84 percent in January, saving companies about $50 million over nine months. Other bills would create a nonrefundable credit for property taxes paid on industrial equipment and base a company's taxes solely on sales rather than the current combination of sales, payroll and personal property.

Another $1.4 billion in tax cuts would be tied to a measure that would limit the annual growth in state tax revenues to no more than the inflation rate plus 1 percentage point. Business would get the additional cuts if tax revenues - excluding federal dollars - exceeded that rate plus another $50 million. Some of the extra money would go into the state's rainy day fund.

In the last 20 years, revenues have gone above inflation plus 1 percentage point 11 times, though the last increase occurred in the 1999-2000 budget year. Most increases came during the boom years of the 1990s.

Sen. Michael Switalski, (D-Roseville), criticized Republicans for passing legislation he said would starve government of funding even when revenues improve by basing future appropriations on current spending, when state revenues are in a trough.

"It is a vision that says, `Now that we have starved state revenue, let's drag it into the bathroom and choke it to death,'" he said.

But Majority Leader Ken Sikkema, (R-Wyoming), said he is more concerned about another trough: job loss.

"That's real," he said. "Our unemployment rate is above the national average. - We need tax relief for the job providers of this state if we're going to have a growth economy."

Critics point to problems in Colorado that have arisen because of spending caps there. But Sikkema said Colorado has a constitutional limit on government revenue and spending. The Senate measure is a regular bill, giving lawmakers more flexibility to address problems. Nothing in the proposal would prevent state or local governments from raising taxes, Sikkema said.

Republicans and Democrats also disagreed over how to structure business tax cuts.

Democrats said the GOP's plan is weak compared with a tax restructuring proposal offered by Democratic Gov. Jennifer Granholm. The governor's plan would drop the single business tax rate from 1.9 percent to 1.2 percent next year, balancing the cut with increases on insurance premiums that would make it revenue-neutral.

"This will not create jobs," Sen. Buzz Thomas, (D-Detroit), said of the much smaller rate cut in the GOP legislation. "We are saying to Michigan manufacturers that we are not in line to help you."

Sen. Alan Cropsey, (R-DeWitt), responded that Granholm's plan is a "tax shift" rather than a tax cut. Granholm has said that three-quarters of Michigan companies would pay less under her plan, while under a fourth would pay more.