LANSING, Mich. (AP) - Lawmakers worked through the night to avoid a partial government shutdown and appeared to be close to a deal Sunday that would increase taxes aimed at plugging a $1.75 billion budget deficit.
The Legislature needs a spending plan finished in time for the fiscal year to start on Monday or most government operations would cease, including services from state parks to road construction.
Democratic Gov. Jennifer Granholm has told about 35,000 of the state's more than 53,000 workers not to report to work on Monday if a shutdown occurs. The remaining workers, mostly related to public health and safety, would stay on the job.
Republicans have pushed Granholm to accept a temporary budget that would extend the one currently in place, giving legislators more time to craft a long term deal.
Granholm has said she won't sign a temporary budget unless she has assurances higher taxes to pay for education, public health and other programs are part of the deal.
Some cost-cutting moves and government restructuring proposals had started to advance through the Legislature during the overnight session.
A conference committee passed a bill Sunday morning that would extend the state's 6 percent sales tax to a wide range of services, including ski tickets, administrative services, consultants and janitorial services. Even if the measure passes the full Legislature, it still leaves a hole of more than $1 billion.
A proposal approved 21-17 by the Republican-led Senate would aim to save money by changing how health insurance benefits for teachers and government workers are managed.
The measure, now headed to the Democrat-led House, is key to the overall budget deal because it could be a trade-off to get Republicans to vote for tax increases.
The House passed bills to create incentives for Medicaid recipients to lead healthy lifestyles, among other reforms, which now are headed to the Senate.
Leaders in both the Democrat-led House and Republican-controlled Senate are optimistic a deal will be reached to avoid a shutdown.
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