Update: Michigan state budget battle

LANSING — Governor Jennifer Granholm told a community meeting Monday that the budget crisis was an "epic battle."
"The fight is about protecting things we know matter to Michigan citizens," Granholm told about 30 people gathered in the Capitol. "This epic battle we are in, I believe is mirrored in Washington D.C. We have to make decisions about who we are as a state. Who we are as a nation."
The governor's spokesperson handed out a document which Granholm said showed how "you could cut your way out" of the budget crisis. She provided two lists of cuts that could resolve the budget deficit. The first was a list of many small cuts. Included in that list were cuts to education, higher education, public safety, community health and human services. In the other list, Granholm said the state could eliminate $1.87 billion dollars by eliminating all funding for higher education in the state, or cut $$2 billion by eliminating state prisons, thereby releasing 51,000 convicted criminals into the community– a plan she said was not possible.
Finally Granholm said a combined large cut proposal could include eliminating the Department of Human Services plus all funding for community colleges in the state. "The choices are not pretty choices," she said. "It has to be a comprehensive solution."
Granholm said a resolution on the budget stalemate has to reached by Thursday or the state computer systems won't have time to kick in the new budget directives in time for the beginning of the month. If the state fails to reach a resolution on the budget standoff by Oct. 1, the state will effectively shut down. Granholm refused to speculate on what a shut down might look like.
"We are not prepared to announce them (plans for a shut down)," she said. "I don't want to panic folks outside the capitol. I know we have to compromise," she said.
"Everyone has to understand we all have to come to the center," said Granholm.