The initial revenue increase would be directed toward the $423 million school aid budget deficit on top of the $1.2 million overall shortfall for the fiscal year beginning Oct. 1.

Under the new proposal, several service areas wouldn’t be under the tax, such as health care, education, real estate and services directly connected to business operations.

It is great the governor is taking extreme measures to cut the budget deficit — what with this tax extension and Granholm’s earlier proposal to urge 46,000 state and school employees into retirement.

They aren’t the most favorable ways to get through and save the state in tough times, but at least she’s making attempts.

It doesn’t appear as though anybody is overly excited about the tax increase, as businesses might see a shortage of customers as prices increase. But Michigan citizens need to realize this tax has the potential to help us get through the state’s financial crisis.

As long as Michigan residents realize they are helping the state balance the budget and continue to purchase the same goods and services as before, the tax proposal can work out for the benefit of everyone.

Granholm said the revenue increase from this tax expansion will keep funding to the state’s pubic education at the current level.

If the state doesn’t come up with a way to raise the money, the students of Michigan could see a greater deficit in funding. Keeping schools funded should be enough of an incentive to pay the tax on services.

A tax on services such as a haircut likely won’t discourage a moptop from trimming his locks, but there certainly are larger services out there that might take a hit if consumers are forced to pay an extra few hundred dollars in additional taxes.

Granholm and state lawmakers enacted a similar expansion of sales tax in 2007 but repealed it a few months later because businesses were displeased with the taxes and were not supportive of the increase.

The plan didn’t exempt business-to-business services like the new proposal, which was the main concern in the past. Hopefully the state pays attention to the affect this tax will have on businesses.

It could be disastrous if, this time, the state implements the tax expansion and simply walks away from the situation. If the tax is enacted and doesn’t work, the state strongly should consider other options.

Although opponents aren’t likely to fully accept Granholm’s proposal, they should understand that it is important to get through the tough times and help pass this proposal.

But it’s also up to the Democrats to enact this plan with responsibility to ensure it works to its fullest potential. If the two sides cannot pass this proposal, something drastic still needs to be done to generate revenue.

If everyone in the state works together — from the lawmakers to businesses to residents — this tax expansion might be a way to turn Michigan’s economy around.