Jobs and education are Michigan’s top priorities, Gov. Jennifer Granholm said in her eighth and final State of the State message last week in Lansing.

“Common sense tells us that in order to create a new economy we must invest in education,” Granholm said. “Today’s jobs require a college degree. … I will draw the line on additional educational cuts in the year ahead.”

U-M receives 22 percent of its Ann Arbor general fund budget from state support, and Its $317 million appropriation is 13 percent less than what it was eight years ago.

“We couldn’t agree more with the governor on the need to invest in education,” said Cynthia Wilbanks, vice president for government relations.

The governor said it “made no sense” for the Legislature to end the Michigan Promise scholarship program last fall, and “my budget will restore the Michigan Promise with a focus on keeping young people in Michigan.”

“Is there a family in Michigan that would make ends meet by first sacrificing the needs of the children?” Granholm asked. “Diversifying our economy, educating our people, protecting them along the way, that is the path forward. We have to pass a balanced budget with urgency, a budget that is going to help us create jobs.”

U-M engineering researcher Ann Marie Sastry was in the House gallery as Granholm cited Sastry’s advanced battery company, Sakti3, based on technology Sastry and colleagues developed through their U-M research.

The governor also cited other companies that recently have set up close to U-M including Google, Toyota, Hyundai and Systems in Motion.

Granholm asked Democrats and Republicans “to put ideologies aside,” saying the budget she’ll submit this week would call on both parties to accept policies they would normally oppose.

“Our world has changed utterly. The old Michigan economy is gone,” she said, noting Michigan had lost a million jobs over the past decade, and the state was at the epicenter of drastic economic changes in 2009 when General Motors and Chrysler entered and exited bankruptcy.

The new Michigan economy will diversify beyond the automotive sector, including newer industries such as clean energy, life sciences, homeland security, defense, advanced manufacturing, film and tourism, she said.

The governor recently proposed budget reforms designed to save $450 million in the first year to help offset a projected $1.8 billion deficit. The proposals include incentives to encourage 46,000 state and public school employees to retire, replacing only two-thirds of them with new workers who would pay 20 percent of the costs for their health insurance coverage.

Those retirements will open up thousands of jobs for young people seeking careers in public service and education, she said.

“I have nothing but hope for the new Michigan on the other side,” Granholm said.

Granholm and Budget Director Bob Emerson will present their budget recommendations for the 2011 fiscal year before a joint meeting of the Senate and House Appropriations Committees at 11 a.m. Thursday at the Capitol.