In the early morning hours of October 1st-the first day of the new fiscal year-the Michigan Legislature approved a continuation budget for fiscal year 2010 after failing to come to an agreement on some of the major cuts proposed to balance a $2.8 billion budget deficit.

The continuation budget authorizes state spending for one month (from October 1st through October 31st of 2009), averting a government shutdown. Although a second continuation budget was voted on to continue payments for K-12 education, agreement has not yet been reached.

The continuation budget gives the Governor and the Michigan Legislature a 30 day window to finalize all state budgets. The Governor can veto specific line items or budgets, and has indicated that she expects to use her veto power "to shape this budget to protect the priorities of Michigan families."

During October, one major question will be whether the Governor and the Michigan Legislature can agree to final budgets that include cuts only, or be able to negotiate either the allocation of additional federal stimulus dollars or new revenues to soften the blow. If no new federal or state revenues are approved, many important children's programs and services are at risk.

Read more in our latest edition of Budget Basics: Update on the Fiscal Year 2010 Budget: Services for Children and Families.