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State of the State is Dire LANSING, MI (MPRN) -

Governor Granholm acknowledged that Michigan is in dire shape in her final State of the State address. But she says her economic policies have set Michigan up for a comeback, even if it won't happen on her watch.

Governor Granholm entered the House chamber at the state Capitol with a confident stride that belies her 30 percent approval rating as she presides over the state with the nation's highest unemployment rate and a new budget crisis. She smiled and shook hands with lawmakers and the legislative leaders whom she battled for much of 2009 before beginning her remarks by acknowledging the severity of Michigan's problems and the anguish of the past year.

"Our world has changed, utterly. The old Michigan economy is gone. Anyone who believed that Michigan would just naturally rebound had a rendezvous with reality in 2009," says Granholm.

That's when the cratering of the auto industry drove Michigan's already high unemployment into double digits.

The governor says her strategy of using targeted tax credits to lure in new employers in new industries is starting to work and will continue to pay off after she leaves office in 11 months.

"Where the old Michigan economy was all about autos and manufacturing, the new Michigan economy is much broader: clean energy, life sciences - like bio-economy and medical devices - homeland security and defense, advanced manufacturing, film and tourism," says Granholm.

A lot of those new jobs will come from small businesses, she said, and announced initiatives to help entrepreneurs with business training and connecting with investment capital.

Michigan State University economist Charles Ballard says helping small businesses is a smart strategy, but Michigan's lost 800 thousand jobs since the beginning of the decade. And forecasters say the state will likely lose another 60 thousand jobs this year.

"It's going to take a long time to make up that kind of lost ground," says Ballard, "In fact, the best I think we can hope for in 2010 is the economy is more or less flat in terms of the job picture."

The governor promised there would be no more cuts to schools, and called on the Legislature to restore the Michigan Promise college scholarship. She says she has a plan to fund it, but didn't release any details.

The governor also called on the Legislature to break the pattern of budget deadlocks in recent years.

"Let's be candid. The budget process is broken. It is a last-minute crisis-driven disaster. We must do better," says Granholm.

She wants the budget wrapped up by July first, so schools, universities, community colleges and local governments know how much money they have coming as they begin their fiscal years.

That could be a tall order in an election year when partisan gridlock is the more common prediction.

State lawmakers from both sides of the aisle were well focused during Governor Granholm's speech. And there were more standing ovations than normal. Democratic state Representative Ed Clemente kept a tally on his State of the State program.

""Twenty-eight," says Clemente, "I think there was a few more only because it was her last time."

Granholm used a small portion of her speech to frame her legacy as a governor whose hard work will be realized after she leaves office. But the remainder of the speech focused on Michigan's economic struggles and triumphs, and Republican state Senator Mike Bishop was unimpressed.

"I just think it was kind of blah," says Bishop, "I didn't really feel like I I was waiting for the big thing to get rolled out to just blow me away. And I didn't feel there was anything there to take away from it."

But there was a portion of Granholm's speech that got under Bishop's skin when she called for the Legislature to put together a balanced budget before July first. Bishop says the Senate did that last year, but did not get any cooperation from the governor.

Still, others liked Granholm's final State of the State speech. House Speaker Andy Dillon shook the governor's hand when she concluded and said what appeared to be the word "wow." He says it's the obligation of Democrats and Republicans alike to work with Granholm to get the budget and reforms done in a timely fashion.

"If we don't do that I think we'll all have a legacy of not having done our work here in Lansing in a way here that we should have," says Dillon. © Copyright 2012, MPRN