Michigan’s Democratic Party has almost reached an agreement with the Hillary Clinton and Barack Obama campaigns for a do-over primary in Michigan. The state would run the vote along with a referendum election that had already been scheduled, but will use privately-raised funds to pay for the rerun. The cost? Perhaps as much as $12 million:

Michigan Democrats are close to an agreement with presidential candidates Sens. Hillary Rodham Clinton and Barack Obama to hold a do-over primary.

Party officials and the campaigns negotiated on Thursday, and state Democratic leaders were hopeful that an agreement could be reached on Friday, said Democratic officials, who spoke on condition of anonymity because of the sensitivity of the talks. To go forward, any plan would require the approval of the two campaigns, the Democratic National Committee, state party leaders and Gov. Jennifer Granholm, who is backing Clinton.

Michigan Democrats need to act quickly because the politically divided legislature will have to sign off on the deal and approve how to spend the privately raised funds for a new election. Members of the Democratic-controlled state House and Republican-controlled state Senate leave at the end of the month on their two-week spring break.

The contest must be held by June 10 for the results to count under DNC rules. Michigan currently has an election set for May 6 for voters to decide on education issues. The date of that contest could be changed to accommodate a new presidential primary.

Michigan originally had 156 delegates, but the DNC stripped them of their entire slate as punishment for breaking scheduling rules. Michigan wanted to have more influence over the nomination process and moved itself ahead of Super Tuesday, but would ironically has been much more important afterwards, as it turns out. The question of resolving the status of Michigan and Florida has consumed Democrats as it has become apparent that no resolution to the primary will result in the status quo.

Unlike in Florida, where all candidates remained on the ballot, Hillary was the only major option for Michigan voters. She won the original vote over “uncommitted”, 55%-40%. These results simply can’t be seriously considered without having given voters an explicit option for choosing Obama rather than Hillary. Michigan has to re-do their vote in order for a delegate split to have any credibility. That’s not necessarily true in Florida, although Obama now complains that the campaign ban imposed by the DNC hurt him more than it did Hillary, which is only credible if people think she’s a better campaigner than he is.

At the moment, Hillary trails Obama by 131 delegates overall and 161 among pledged delegates. She needs to win Michigan and probably has a good chance of doing so. She has carried states with high percentages of working-class whites, such as Ohio, and Michigan fits that mold. If she can win Michigan and force the DNC to accept a delegate split based on the first Florida vote, she could wind up gaining 30-40 delegates. That won’t cut into Obama’s lead too deeply, but combined with a streak of wins in the Rust Belt, she could get close enough to make a case for a superdelegate win in Denver.