Colleagues:
 
Back in 2003, in my first State of the State address when I was assessing the challenges the state was facing then, I said that Michigan would "not wait for the storm to pass over;" we would learn "to work in the rain."  Now, more than four years later, it is still raining...the economy continues to be challenged by the sea-changes in our manufacturing foundation, impacting the state's budget despite continuing cuts and your sacrifices. 

While I know we continue to share a vision of Michigan where our work as public servants is building a state where jobs are plentiful, our children choose to raise their families here, and every family has the opportunity to succeed - our situation today remains daunting:

•  Even after executive order cuts of $344 million, the state still faces a shortfall of at least $686 million this fiscal year and faces another $2 billion shortfall for the 2008 fiscal year that begins in just six months.

• Even more pressing, however, is a cash-flow problem that faces the state right now.  According to the state treasurer, without new revenue or deep, deep cuts to state programs, the state is likely to run out of money as early as May, and we will continue to be short of operational cash until budget issues are resolved.  Some have suggested deep cuts to solve the state's future budget issues, but those cuts do nothing to ensure the state has the cash it needs to pay its bills now, and they put our citizens in harm's way.

• As you know, I believe strongly that for Michigan to be successful in the future, we must give all our people the tools they need to be successful.  We have to invest in, not slash, things like education, worker training, job recruitment efforts, affordable health care, and college opportunities.  The budget I proposed is a mix of cuts, reforms, and new revenues and is a roadmap to that economic strength.  The Legislature has, so far, rejected that course, and precious time is passing as they come to grips with the real extent of the problem and what must be done.

After working together to resolve nearly $4 billion in budget deficits over the last four years, there's little question that these latest challenges are especially painful.  I know these are anxious times, but I hope we can all dig deep, stay strong, and recommit to the vision we share for Michigan.

We can start by continuing the great efforts so many of you have made to find creative ways to save money within state government.  Last month, I asked you for your ideas for cost savings.  We received more than 100 replies and, again, I thank those who took the time to reply.  Those ideas are being reviewed, and we will implement all that we can - from those that save just a few pennies to the big ticket savings.  

I hope you'll make it a part of your job description starting today to find savings in your job and in your department.  Have conversations with your colleagues to bounce ideas off each other.  Together, you may find undiscovered opportunities to cut down on expenditures.  Perhaps you'll find ways to provide the same or better service with fewer meetings and fewer people signing off on the process while still respecting our shared values of teamwork, excellence, integrity and inclusion.  I assure you, this re-evaluation will help make us all more productive and effective, and bring with it a great measure of accomplishment.  I want to thank you, in advance, for working with your department directors as they strive to meet the requirements of our tightened fiscal policies. 

I understand how counter-intuitive many of these budget cuts may seem and how it makes our mission even more of a challenge.  But they will help us meet our fiscal challenges in the long-term, and will help ensure the state has the money it needs to continue critical services this year.  Know that I will be the first to defend you from those who attack the good work you do as state employees, and I'll continue to fight for a state budget that invests in our future rather than cuts the very work you do to help make us more competitive in the future.

Thank you for continuing to do such great work for Michigan's citizens...even during these rainy, rainy days.

Sincerely,      
Jennifer M. Granholm
Governor