If no budget deal is reached Thursday solving the state's budget deficit, she says a variety of services such as processing motor vehicle titles and giving out driver's licenses could be affected.
But state programs that protect citizens' health and safety, such as state police patrols, will continue, she said.
"In the event the Legislature forces us into a partial government shutdown, it is our intention to continue the most vital services until a budget resolution is reached," Granholm said in a statement Wednesday.
It was the governor's first public statement on what services may be shut down and which will be kept open if a shutdown occurs. She previously had refused to say what would happen in the event of a shutdown because she said she wants a budget deal that would avoid a shutdown.
Some lawmakers have indicated they have until Sunday to get a budget deal and temporary budget in place so the state can keep operating Monday. But not everyone agrees.
In a letter to state employees, department heads said Granholm hopes to reach a budget resolution by the end of the day Thursday, "as Friday is the last day most of you will be in the office and can be officially notified if state offices are to be closed on Monday."
The said further details would be released Friday, when employees would be told how a partial shutdown would affect them. The state has more than 50,000 employees.
The state Civil Service Commission has a meeting scheduled for Friday morning at which it could change layoff rules, allowing state workers to be laid off without the usual 30-day notice.
The Democratic governor, Democrat-controlled House and Republican-controlled Senate have failed to agree on how to erase a projected $1.75 billion deficit in the state budget for the fiscal year that starts Monday.
A bipartisan House-Senate conference committee convened briefly Wednesday morning to consider an income tax increase, but took a break immediately. Talks were continuing Wednesday, but time was getting short to reach a deal.
Republican senators have passed a bill that would save about $950 million through cuts and spending limits, while Democrats say that's unacceptable because it would harm public safety, health care and education.
The Senate also has passed a bill that would allow a 30-day extension of the current budget structure. The legislation is pending in the Democrat-led House.
A temporary budget extension likely is needed to avoid a shutdown at this point, but the Granholm administration says some sort of revenue increase must be included in a budget plan before the governor would approve a temporary budget.