Michigan’s governor is trying to revive a political battle over the funding of the Michigan Promise Scholarship — a popular, merit-based program that was among the casualties of a prolonged budget fight in Lansing that ended late last month.

In a conference call yesterday with college newspapers across the state, Democratic Gov. Jennifer Granholm discussed the implications of cutting the Michigan Promise Scholarship and urged students across the state to rally against state representatives and senators to reinstate the program.

Granholm signed the higher education bill for the 2010-2011 fiscal year that included cutting the Michigan Promise Scholarship and general cuts to higher education at the end of last month. Throughout October, the state operated under an interim budget that was adopted after state lawmakers failed to pass a final budget at the end of September.

Students eligible for the program were set to receive $500 to $4,000 — as determined by a standardized exam taken in high school — over the course of four years to help cover some of their tuition costs.

More than 96,000 college students across the state and 6,096 University of Michigan students were set to receive money from the Michigan Scholarship Program next year. If maintained, the program would have cost the state approximately $100 million.

Despite signing the higher education bill into law, Granholm said she is determined to restore funding for the program.

Granholm said the Michigan Promise Scholarship is not only meant to ease the burden of pricey tuition for students and families, but also to improve Michigan’s economic climate by educating its citizens and creating competitive employees to be retained by businesses in the state.

“All of our manufacturing businesses and jobs are in crisis because of the global shift in manufacturing jobs as a challenge to our auto industry,” Granholm said. “The way we will emerge is to diversify this economy and educate our citizens. And if we don’t educate our citizens we are not going to be able to diversify. We’re not going to be able to attract the best providers, the knowledge jobs that we want.”

The Michigan Promise Scholarship faces its strongest opponents in the Republican-controlled state Senate, where legislators have been hesitant to continue a program that doesn’t have a clear source of funding.

In the call, the governor said that despite the questions over funding, education must continue to be a central focus for support from the state.

“There certainly isn’t a consensus on the part of legislature and the governor about the priorities,” Granholm said. “I believe we must invest in education. The legislature believed it was more important, or at least the Senate, believed it was more important to cut then to provide the funding that would protect education from being deeply cut. We disagree. It is a philosophical disagreement.”

Some senators have identified the possibility of slowing the phase-in of an earned income tax credit to help fund business tax cuts. Granholm said the Senate should use this revenue to fund the Michigan Promise Scholarships instead.

“They have already made a commitment to raising revenue, although for a different purpose,” Granholm said. “Because the earned income tax credit can only be phased in, or frozen, flowed down, that revenue can only be used for specific purposes, and not for business tax cuts. What we need to do is persuade the legislature to redirect those savings to the Promise.”

Last year the earned income tax credit was at 10 percent, and is supposed to increase to 20 percent next year, which would cost the state $150 million. But, under the proposal, that percentage would be dropped to 12.5 percent to raise money for the state — money Granholm says should be re-routed to resuscitate the Promise Scholarship.

Despite already cutting $1.9 billion from the state’s 2010-2011 budget, lawmakers in Lansing are facing a looming $1.4 billion deficit projection for next year.

Some colleges in the state like Saginaw Valley State University have already decided to provide funding for students who lost the Promise Scholarship. However, the University of Michigan will only provide the scholarship for those students who demonstrate financial need for the scholarship, Cynthia Wilbanks, vice president for government relations for the University told the Daily in October.

Despite this effort on the part of the universities, Granholm said the responsibility to finance the scholarship program lies on the shoulders of the state legislature, noting that if universities provide funding to students for the scholarship, they will be taking money away from other important university programs.

“This is a state commitment and the universities that have made that decision are doing that out of tremendous leadership and benevolence” Granholm said. “This is a state commitment and the state has to make a commitment to higher education.”

The state legislature will take the time between now and the end of the year to “do clean-up work” on decisions that were made during the year, Granholm said, predicting those projects being cleaned up will include the reinstatement of the Promise Scholarship.

The state Senators have said they will not reconsider any budget items from last year, a fact Granholm acknowledged. However, Granholm said she thought with pressure from students across the state, state senators would reconsider their stance.

“This time the legislature really blew it,” Granholm said. “We did not have to rob students from the Promise Grant and jeopardize Michigan’s future — especially with respect to diversifying our economy and creating a skilled workforce.”

“We need students to know that this fight is on and that we can win it and that these legislators are persuadable,” Granholm continued, “but they won’t be persuaded if we’re quiet.”

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