Lt. Gov. John Cherry will lead a year-long commission charged with reducing the number of state departments in future years, but Granholm will propose scrapping the 226-employee, $52.2 million Department of History, Arts and Libraries this year.

The state faces a $1.6 billion deficit for the budget year beginning Oct. 1, as state revenues dwindle due to the limping economy and a jobless rate of more than 10 percent.

Her short-term reform plan would end all state financing of the Michigan State Fair in Detroit, the nation's oldest, as well as the Upper Peninsula State Fair in 2010. The State Fair -- a showcase for Michigan's $64 billion agricultural industry -- is an agency of the Department of Management and Budget, and is held on state property. It's supposed to pay for itself, but the state treasury has been covering shortfalls ranging from $50,000 to $1.3 million in recent years. Attendance has dropped 39 percent since 2000 and corporate support also has declined.

And that's the big headline grabber this morning.  The gov wants to kill the State Fair.  With a $1.6 billion deficit, the big ticket savings item the fawning MSM has already glommed on to is a proposal that would save as little as $50,000 a year.  

Of course the LG has likely already sent out campaign emissaries into the Ag community letting them know that he disagrees with the Governor on this one and that he's working as hard as he can to get her to back down.  Good cop bad cop.  

Meanwhile, the structural budget deficit, likely to be patched with yet another one-time fix and fed with stimulus cash that won't be there in the future remains tied tightly around the state's neck.  Making tough choices is overrated anyways.

Oh, and friendly reminder time, like last year RightMichigan will be on the web liveblogging tomorrow evening's speech from Lansing.  Make sure you stop by and join in the conversation!