Michigan Gov. Jennifer Granholm last week issued an executive order with $350 million in spending cuts to address declining revenues that she blamed in part on the auto industry’s struggles.
“The national recession has plunged our domestic auto industry into a severe crisis that has resulted in a sharp decline in state revenues,” Granholm said in a statement. “These cuts are necessary, but they will not undermine our commitment to protect citizens and work to create jobs during these very tough times.”
The executive order calls for temporary layoffs for all state employees in nonessential positions that will result in a shutdown of most state government operations on six days between now and the end of the current fiscal year on Sept. 30.
General fund revenue is projected to decline 21% from fiscal 2008, or 23.5% when adjusted for inflation — the largest one-year decline in at least 50 years. The cuts follow an executive order issued by Granholm last December reducing spending by $134 million. New formal revenue estimates are expected this week.