Granholm tries to stimulate Michigan economy with $150 million in bank deposits

LANSING, Mich. (WZZM) - Governor Jennifer Granholm knows Michigan's economy needs a boost, and she says she's taking some measures to help.

The Governor announced several new state initiatives this morning to address the economy, including pending state budget cuts.

Now that the election is over and we have an idea of the direction of the new presidential administration as well as state offices, Governor Granholm is ready to get to work.

Granholm knows the economic downturn is hurting Michigan's already struggling economy. She is already planning for budget cuts.

Granholm says, "I will be issuing an executive order for budget cuts before the end of this year."

When asked if those cuts would be in the 300 to 600 million dollar range, Granholm didn't comment, but said she would wait to hear forecasts from University of Michigan economists later this month and to see what a possible federal stimulus package looks like. Granholm says, "We know we're going to have to cut. We don't know how much we're going to have to cut."

Granholm is also trying to stimulate Michigan's financial picture by making more cash available. The state treasury will deposit $150 million in state regulated banks and credit unions in the form of certificates of deposit. This should give the financial institutions more liquidity and help businesses. Granholm says, "That funding is going to be made available on the condition that at least 80 percent of it is loaned to Michigan businesses, who are struggling to make payroll or to invest in new equipment or products."

Granholm is also urging the state legislature, now in its lame duck session, to take action. She's asking lawmakers to pass a Home Foreclosure Prevention Act. It would allow the state banking commissioner to declare a 90 day delay in foreclosure proceedings for homeowners to work with their lender. Granholm explains it would "allow them to work out a payment plan that will allow them to stay in their homes." The legislature will also be asked to tackle promise zone educational funding, as well as money for several projects on the east side of the state.

Governor Granholm also sent a letter Thursday to U.S. House of Representatives Speaker Nancy Pelosi and Senate Majority Leader Harry Reid asking for the federal government's help in stimulating Michigan's economy through infrastructure funding, extended unemployment benefits, and a loan to the automakers. To download the letter - CLICK HERE.

Granholm also addressed the current situation facing Detroit's automakers. She said making sure the domestic auto industry survives is a matter of national security.