LANSING -- Senate Republican leaders said today they will turn down Gov. Jennifer Granholm's budget-balancing plan for this year because they oppose a tax hike she has proposed.

The $800 million-plus deficit in the budget year that ends Sept. 30 can be entirely closed by making cuts, said Senate Majority Leader Mike Bishop, R-Rochester.

"The Republican caucus has said we can get it done with cuts and we're going to put our money where our mouth is," Bishop said. He didn't specify where the cuts would be made, but said school aid reductions are on the table.

The rejection of the governor's executive order, to be made official at a Senate Appropriations Committee meeting later today, means Granholm must propose another plan within 30 days. Republican senators will draft their own proposal for balancing the budget in the next couple weeks, Bishop said.

"We hope we can negotiate the next executive order," said Senate Appropriations Committee Chairman Ron Jelinek, R-Three Oaks.

Granholm's overall plan is predicated on a new 2-penny-per-dollar tax on services, among other tax hikes. The service tax would go into effect June 1 and raise $525 million toward resolving this year's deficit.

The governor also proposed an accounting change in teacher retirement calculations that would save $278 million, a delay in higher education funding that would net $69 million and $43 million in cuts, including child care services, cooperative extension service and other programs.

Her plan spared cuts in school aid, which is short by $377 million, a deficit that would require reductions of $224 per pupil to eliminate. Bishop and Jelinek said they hoped to mitigate school aid cuts but added education reductions will be considered.

Senate Appropriations Committee Vice-Chairman Michael Switalski, D-Roseville, called the Republicans' rejection of the executive order "a missed opportunity."