Gov. Jennifer Granholm last week said she would stop pushing a proposal to lower Michigan’s sales tax while extending it to cover some services due to lawmakers’ resistance.

Granholm first pitched the idea at her state of the state address in February, saying it would raise up to $500 million in new revenue for the fiscal 2011 budget. The measure would lower the sales tax to 5.5% from 6% and extend it to cover some, but not all, services. At the same time, the state would have phased out an unpopular 22% surcharge on the Michigan business tax.

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