Granholm avoided the state’s second government shutdown by signing the bills one day before the state’s temporary budget expired. Michigan lawmakers passed a temporary budget Oct. 1 when they failed to settle the state’s $40 billion budget, which caused a two-hour government shutdown.

“I will not pretend that this is a good budget,” Granholm said in a statement. “This budget cuts, rather than supports, Michigan’s most pressing priorities — educating our children and helping them pay for a college education, maintaining health care for our most vulnerable citizens, and keeping police officers and fire fighters on the streets of our communities.”

Before finalizing the budget, Granholm announced $127 million in additional cuts through line-item vetoes. Items vetoed included earmarks and pilot programs built in by the Legislature, said Megan Brown, a spokeswoman for Granholm.

“If there was something in the budget that we didn’t have enough money to fund completely, I vetoed it,” Granholm said in the statement.

By signing all 15 budget bills, Granholm eliminated the state’s $2.8 billion deficit. In addition to the Michigan Promise Scholarship, financial aid cuts eliminate the Part-Time Independent Student Program, the Michigan Work-Study Program, the Michigan Education Opportunity Grants and state nursing scholarships. University operations funding was cut by 0.4 percent for 15 universities.

MSU will receive $29.1 million for university operations — a $1.2 million decrease from last year’s $29.3 million.

“It’s almost like they are pushing us out of the state,” construction management senior James Savage said. “They’re screwing the people they want to stay here.”

About $68 million of this year’s $1.6 billion higher education budget is funded with federal stimulus dollars.

And stimulus funds won’t be available next year, which will make the budget even harder to balance, said Alan Fox, a political consultant with East Lansing-based Practical Political Consulting Inc. He said without tax increases, the state never will have enough revenue.

“The state of Michigan is drowning in a bathtub,” he said. “It’s being held underwater and revenue is going to constantly be a problem.”

Granholm will fight for tax increases and revenue enhancements to restore the Michigan Promise Scholarship, Brown said. The House has proposed revenue enhancements such as reductions to business tax credits and noncigarette tobacco taxes.

But Matt Marsden, spokesman for Senate Majority Leader Mike Bishop, R-Rochester, has said the Republican-led Senate will not pass any tax increases to fund items eliminated to balance the budget.