Leave a legacy, Gov. Granholm

The worst kept secret in Lansing this year has been how much Jennifer Granholm wanted to skip town -- and how badly folks from both parties were dying for her to do just that.

After the governor was named to Barack Obama's economic transition team, most of Lansing's chattering class considered her a lock for a cabinet post. Evidently, the New York Times was convinced enough to run a cover story and all the networks came calling.

Around the corridors of the Capitol, Democrats could be seen crossing their fingers that the governor's name would be announced. And Republicans grumbled that although she certainly wasn't qualified for Labor or Energy Secretary, Granholm could sell anything.

The general sentiment among legislators was that they'd love to spend the next two years working with Lt. Gov. John Cherry, especially with the sorry shape the budget's in. And Democrats relished the idea of him waltzing into the 2010 election as an incumbent.

But after weeks of Obama's methodically laudatory press conferences, which had to be a form of Chinese water torture for the guv, she surfaced with bupkis.

Last week, she quickly put out the word that she wanted to stick it out here, "given all the crises Michigan is facing." But it was painfully clear that Granholm had been passed over for Labor and was allowed this face-saving gesture by Team Obama. Sure enough, a California congresswoman nabbed the post two days later.

That's not to say Granholm will walk away empty-handed in the long-run. Not all cabinet nominees make it through the confirmation process or serve a full term. And after her rave reviews for conducting the Kwame Kilpatrick hearing this summer, she'll certainly be on the federal bench list.

But it's a significant blow. Republicans will undoubtedly try to pounce on her weakness in negotiations, although after the beating they took on Nov. 4, they're pretty anemic themselves.

The more salient issue is why so many lawmakers of both parties were terribly eager to throw the governor a goodbye party.

In reality, this sentiment really isn't anything new; it's just reached a fever pitch after last year's government shutdown and it looked like Obama was generously posing a way out.

Granholm arrived at the governor's mansion via the attorney general's office, not the Capitol, and her lack of legislative experience has always caused tension. Like Bill Clinton in 1993, the governor frankly didn't get how the process worked and it's cost her dearly.

She's made deals that she's quickly reneged on, as even Democrats gripe, which has long eroded trust with lawmakers. Now that Senate Minority Leader Mark Schauer, D-Battle Creek, is hightailing it to D.C., she's lost her biggest legislative ally. House Democrats are far more loyal to Speaker Andy Dillon than to her, something of which she's well aware.

Meanwhile, Senate Majority Leader Mike Bishop, R-Rochester, has a visceral disdain for Granholm. He recently sniffed to the Wall Street Journal that she "likes to be governor more than she likes to governs," which is kind of like Ken calling out Barbie for vanity.

All this means that we can look forward to a couple of years of fabulous friction, as 2009's budget hole is at least $265 million and 2010's is a jaw-dropping $1.5 billion, unless Obama's federal stimulus saves the day. Granholm, Dillon and Bishop are all term-limited, as well as a good chunk of the House and all but eight senators, which means a lot of folks will be lookin' for work instead of workin' full-time for Michigan.

Out of crisis can emerge great leaders. There seems little hope for that in the Mitten State, if the '07 government shutdown is any guide. But it's legacy-building time and this is the governor's shot.

Few honest Republicans would dispute that she is immensely intelligent, persuasive and personable. No one is more aware of the problems Michigan faces than she is.

So in her final two years, Granholm should draw on her talents and be the leader she has always had the potential to be. Start with slashing the bloated Corrections budget and dumping the Michigan Business Tax surcharge. Revisit the idea of doubling the number of college graduates by 2015 and make sure we're on track. Have the courage to fix the structural budget deficit by pushing for a ballot question on a graduated income tax.

For years, Michigan has passed a slew of economic development measures to lure new businesses. The time now is to look long-term for the state's fiscal health.

None of this will guarantee her a job with Obama. In reality, it probably won't help much. Her polls numbers aren't going anywhere but down as the economy plunges south.

What will help is that Granholm has the highest national profile of any governor in modern Michigan history. She'll continue to get invites for "Larry King" and "Good Morning America" about the Big Three. It would be very tempting to rely on that exposure to net her next job.

But that won't do a damn thing for Michigan.

Granholm promised to "never stop fighting" for us. It's been six long years and talk is cheap. Governor, the time to act is now.

A death sentence for Detroit

Polls show most Americans don't want Uncle Sam to help the Big Three and I couldn't care less.

They're wrong, plain and simple, but it's not entirely their fault. The amount of misinformation floating out there on ye olde information superhighway and from TV anchors who should know better is staggering.

Certainly there's a bit of bailout fatigue. The $15 billion bridge loan that cleared the U.S. House on Wednesday is a lot of money. Senate Republicans slayed it Thursday and the deal looks dead.

This would be utterly devastating for the U.S. economy - not just Michigan's.

Now would be the perfect time for U.S. Sen. John McCain, R-Ariz., to be the statesman he is and end this political brinksmanship rooted in deep-seated denial of financial reality. He got hammered this fall for suspending his campaign to push for the $700 billion Wall Street bailout. No one could accuse him of playing politics now; this would simply be bold action for the good of the country.

The fact is, letting just two of the three domestic automakers go bankrupt means the death of 1.8 million jobs in just the first year alone.

Still don't care? Won't affect me or my state?

Try this. Taxpayers will see $66 million swirl down the drain in two years if just two of the companies go bankrupt. Bye-bye tax revenue; hello unemployment insurance.

The cost of bankruptcy is more than four times what the autos could get from the feds, according to a report by the Anderson Economic Group. CEO Patrick Anderson is a staunch fiscal conservative, so it's striking that he's not arguing that the free market should be allowed to work here.

The reality is, the more economically prudent solution is the bridge loan. Every taxpayer in America should be treated to a copy of this report.

Unfortunately, this won't stop the Big Three bashing because it's too much fun. What we have is an axis of ignorance of far-out environmentalists and free-market Republicans.

The left whines that Detroit's gas-guzzling dinosaurs rape the planet and there's karma in letting them wheeze out their last breath. Their greedy CEOs sucking up $20 million bonuses are the living symbols of what's wrong with capitalism.

Yeah, not very powerful stuff. That's why this hasn't really gained traction and even big-time liberals like U.S. House Speaker Nancy Pelosi are willing to lend Motown a hand.

The right, however, is scoring big with its version of economic nihilism run amok. It's the unions' fault, of course, and even reputable media are selling the falsehood that workers make $70 per hour. The New Republic has nicely debunked this myth and you'll notice that conservatives in Michigan, no matter how anti-union, haven't jumped on this bandwagon.

U.S. Sen. David Vitter, the Louisianan best known for using the services of the D.C. Madam, this week derided the bridge loan as being "ass-backwards" in a rambling speech that proved he knows a lot more about hookers than economics.

Southern Republicans smugly brag that their foreign plants will flourish if the domestic autos combust. Yeah, here's the problem. When auto suppliers start croaking - and they will - Honda, Volkswagen and Toyota will bleed, even more than they are now.

By the way, Japan, China and Germany haven't had any problem bailing out their automakers. Kind of an unfair disadvantage, don't you think?

Both sides agree that the Big Three got too fat and happy (true) and churned out cars people didn't want to buy (also true, but now even Toyota's sales plummeted 32 percent last month). Why? The credit crunch, which has pushed the Big Three to the brink, just as they were making the labor and technology overhauls they need to thrive.

Peel away the political spin, and that's the real cause of the current crisis.

But when economics get too complex, there's always the shorthand of blasting the Big Three titans for their nasty corporate jet habit.

There's a disingenuous double standard at work. The bridge loan pales in comparison to the tens of billions of dollars the feds have thrown at financial institutions like AIG and Citigroup. Their executives somehow escaped begging on Capitol Hill but the Big Three's humiliation (twice) provided hours of entertainment on C-SPAN.

At this point, the Big Three need a Christmas miracle. This is not a regional issue, but it's looking like Michiganders need to lead the way - and not just at the federal level.

Gov. Jennifer Granholm; Senate Majority Mike Bishop, R-Rochester; and House Speaker Andy Dillon, D-Redford Township, should be holding daily joint press conferences on the car crisis.

There are still some Mitten Staters who believe that Ford, GM and Chrysler are getting what they deserve and the rest of us will somehow be hunky-dory. They need to hear a strong bipartisan counterpoint to the dead-enders.

Letting the Big Three die isn't just cutting off our nose to spite our face. It would be a decapitation.

How to kill a business tax

Here's the bad news: There are no easy answers to solve the state's looming $400 million shortfall.

But the good news is, there's an obvious way to slay the much-maligned Michigan Business Tax surcharge. The Legislature rushed this 19.99 percent levy on top of the new MBT late last year in the frenzy to dump the service tax, which was deemed even worse.

The surcharge is now the bane of business owners' existence, with 9 percent telling the Michigan Chamber of Commerce they're considering leaving the state over it.

Senate Republicans have passed legislation killing the surcharge and promise to balance the budget with magical budget cuts yet to be revealed. While that might make Chamber members feel warm and fuzzy inside, it's akin to doing nothing because there's no deal with the governor or Democratic House.

Meanwhile, the credit crunch is smacking around our battered economy even more and unemployment is certain to veer into double-digit territory soon.

Republicans are right: We can't afford to keep a job-killing tax.

So I'll defer to an idea proposed by two GOP lawmakers, Reps. Chris Ward, R-Brighton, and Lorence Wenke, R-Richland. Let's snuff out the surcharge and up the income tax a bit, say between 4.6 and 4.8 percent. That'll cost the average family about an extra fill-up a year.

The time to do it is now, because as the deficit balloons next year, any kind of tax cut will be off the table.

Unfortunately, the odds of this happening are nil. Senate Majority Leader Mike Bishop, R-Rochester, isn't budging from his no-tax stance, even if it'll squeeze the business community. House Speaker Andy Dillon, D-Redford Township, is skeptical.

"We'd be sending the message that we're increasing people's taxes to cut business taxes," Dillon told me. "I was willing to do that a year and a half ago. So if Mike Bishop can find those votes and wants to send something over, he's welcome to."

It's true that Bishop could have OK'd this deal during last year's budget crisis and we wouldn't here today.

But the plan hatched by Michigan Republican Party Chair Saul Anuzis and House Minority Leader Craig DeRoche (dear God) was to force as many Democrats as possible to vote for tax increases. That was the key to a GOP victory in '08.

So what was their plan to solve the $1.8 billion budget crisis? There wasn't one.

Astute readers will recall that Republicans actually lost nine House seats on Nov. 4. And the much-ballyhooed recall campaign failed miserably.

Not one legislator lost a seat over the tax hikes. Not one.

Ward just shakes his head. "Not only did we have bad policy, but it turned out to be bad politics, too."

Of course, Ward did lose. Not his seat - he's term-limited - but his GOP leadership post for being a grown-up willing to deal with the pagan Dems to get more budget cuts, less taxes and more reforms.

Oh, well. I'm sure the Chamber doesn't mind. Neither do business owners slapped with 1,700-percent increases in their tax bills.

Negotiating is for sissies.

Anyway, back to this year's budget mess. What's that you say? Can't we just cut fat out of the budget? I'm with you, brothers and sisters.

The income tax for surcharge was really Plan B. What Ward would actually like to see is cutting Corrections (which eat up $2 billion of our $9 billion general fund) in exchange for the surcharge. Gov. Jennifer Granholm first proposed the swap this summer, but she didn't provided specifics.

Now we have the blueprint, thanks to the $800 billion in cuts proposed by the economic development powerhouse, Detroit Renaissance. That's even more than what the surcharge generates, which is about $600 million this year and more than $700 million in years to come.

"It was something that we should have done during the budget crisis," Ward said.

Amen. Unfortunately, leaders don't want to take on politically unpopular reforms ranging from sentence guideline reform to shuttering prisons. Even the governor said it would be impossible to do everything in the last few weeks.

Corrections is the logical place to start. It's the one area of the budget that's been spared from the chopping block. Our prison population has soared by 538 percent in the last three decades and costs have skyrocketed 5,000 percent, according to the nonpartisan Citizens Research Council. With more than 50,000 inmates, Michigan has the highest prison population in the Midwest. The cost of a year in prison is $30,000 per inmate.

Clearly, something has to be done.

This will be the battle of 2009, make no doubt about it. And everyone, from Granholm to lock'em-up Sen. Alan Cropsey, R-DeWitt, is sure grateful that a third-party group, the Council of State Governments, will be issuing a report with cuts they can hide behind.

Everybody claims credit for a tax cut. But nobody wants to be associated with cuts that could let the bad guys out (and more importantly, be used in political ads against them).

Looks like this budget battle could turn out to be as much fun as last year's. Lucky us.

What's the matter with Michigan?

"When are you going to leave Michigan?"

That's the question my exasperated parents ask me at least once a month.

It's their endearing effort to entice me to move back to Sweet Home Chicago, a magnet for Gen Xers in the Midwest and beyond. They really don't have to sell me on a city with stellar theater, independent cinema, museums, outdoor dining, urban parks and, of course, miles of beachfront along Lake Michigan.

Too bad I'm head-over-heels in love with the Wolverine State, a land of tragically flawed heroes, from Lewis Cass to W.K. Kellogg. It's home to perhaps the finest historical museum in the country, the sprawling Henry Ford, and the rare and used bookstore I could die in, John K. King's concrete paradise in Detroit. We have the unblemished side of Lake Michigan, thank you very much - not to mention three other Great Lakes that carve out our two peninsulas.

But in the eyes of my protective parents, Michigan is the rustiest of the rust belt states - a lumbering, rancid remnant of manufacturing's glory days.

What they see in the news is 6.9 percent unemployment - sadly the lowest rate we've hit in a year, which still tops the country. They shudder about crime rates in Detroit, Flint and Saginaw (not to mention their third-world infant mortality rates).

My Republican accountant father sighs at our business-unfriendly tax structure and my Democratic teacher mother shakes her head at our abysmal high school dropout and college graduation rates.

Those are the problems we've grappled with for years.

But lately, it seems Michigan is even more determined to become the laughingstock of the nation. If we're on tee-vee, you can bet you'll want to cover your eyes.

That's what happens when you're overrun by folks suffering from childhood regression and determined to take it out on Michigan.

There was our 11-month soap opera last year over a budget bleeding $2 billion. We all knew how it would end thanks to our clueless, preening leaders, who at least looked pretty for the cameras before they shut the government down.

Gov. Jennifer Granholm (whose smile beat out two grownups in the 2002 Democratic primary) still had to be the most popular girl in school and couldn't make tough choices. Senate Majority Leader Mike Bishop, R-Rochester, tried to be the Big Man on Campus and lost badly, while House Speaker Andy Dillon, D-Redford Township, was a freshman trying to be student body president.

In the press box, I glanced up from rereading David Halberstam's "The Best and the Brightest" to watch rumple-shirted, sleep-starved senators screaming, pouting and almost busting into fisticuffs like 6-year-olds coming down from a sugar high on the playground. And I wanted to weep.

Then there was our January primary, a glorified toddler tantrum by Democratic National Committeewoman Debbie Dingell and Michigan Republican Party Chair Saul Anuzis. (Nyah, nyah, Iowa and New Hampshire, you can't keep us down). Only Saul was smart enough to massage his national party, while Mrs. D flicked off the DNC and got the state's delegates yanked.

While the botched primary permits Hillary Clinton to throw her own hissy fit about seating the Michigan delegation (seriously, Hillz, it's like the struggle to free the slaves?) it really just makes us look stupider than 48 other states plus Guam.

And now Leon Drolet, still trapped in the moody adolescent phase of Ayn Rand worship that sets in when your sweetie says no to prom, wants to "make history" by recalling Dillon. Evidently, the speaker raised taxes all by himself last year.

Boy, I just can't wait for national coverage of Libertarian Leon (neither can he) throwing the state into further chaos.

Fortunately, there is a small group of thoughtful, committed citizens, as Margaret Mead would say, who want to change the world - or the state, more precisely. The Center for Michigan, an Ann Arbor think-and-do tank, on Thursday released its 35-page, common-ground agenda for the Michigan's Defining Moment campaign.

It's chock-full of priorities for the state to embrace leading up to the 2010 election, including education, bipartisanship, quality of life and economic diversification, thanks to hours of work from more than 1,800 citizens. And in the interest of full disclosure, I was one of the wonks who helped write part of the report.

More importantly, the campaign has real-world strategies and is a call to action. In a sense, it's a blueprint for how the Great Lakes State can come of age even with a hamstrung term-limited Legislature, dismal economy and outmoded, underfunded schools.

Newspaper magnate Phil Power started the center after he sold his company in 2005 and decided, "I'll be damned if I will let the Florida sand flow through my toes and stick my hands in my jacket pocket while my state is going to hell."

Former Gov. Jim Blanchard tells me he's optimistic: "I just can't believe the great state of Michigan can stay down."

That's why I love this state, why I want to fight for it. And that starts with my decision to stay put.

Susan J. Demas on "Off the Record"

"Off the Record," hosted by Senior Capitol Correspondent Tim Skubick, featured a panel Friday, May 2, of Susan J. Demas of MIRS, Bill Ballenger of Inside Michigan Politics, Kathy Barks Hoffman of the Associated Press and Rick Pluta of Michigan Radio.

The recall attempt of House Speaker Andy Dillon, Gov. Jennifer Granholm's emergency surgery, the Michigan Democratic delegate debacle and the Rev. Jeremiah Wright controversy were debated.

To catch the show online:

Off the Record 5.2.08

The taxpayer revolt that wasn’t

During last year’s budget crisis, we were promised a good, old-fashioned taxpayer rebellion, complete with pitchfork-waving citizens storming the Capitol to impale cowering, tax-hiking lawmakers.

What a letdown.

My old pal Leon Drolet swore there would be recalls by the dozens thanks to boatloads of cash and a groundswell of popular support. But the GOP former legislator has only mustered one real effort against House Speaker Andy Dillon, D-Redford Township.

And how much has the Michigan Recalls Organization raised in Dillon’s 17^th District?

A whopping $5, which can buy you a Whopper value meal at Burger King, as long as you don’t get all greedy and king-size it. I should note that since campaign finance reports were filed through April 20, the group claims to have raised a full $75 more.

Even Drolet - whose best friend is a giant foam pig named Mr. Perks - admits in his lucid moments that a taxpayer rebellion this isn’t.

But no matter - he’s got a good chance of pulling the recall off anyway.

This would, of course, be devastating for the state, as even Republicans know Dillon is hardly the symbol of all that is wrong in Lansing. He was the voice of centrist sanity last year while the state faced a $2 billion shortfall and is the architect of the only notable economic program passed in recent years, the 21^st Century Jobs Fund.

If all legislators had Dillon’s intellect, conscience and wit, the state would be in far better shape, even in this era of cowardice and crippling term limits.

Drolet’s henchwoman, Rose Bogaert, fired off a grammatically challenged e-mail to me weeks ago whining that Dillon is personally responsible for the tax hike, which costs the average family $200 a year. That’s about a month or two’s worth of gas price increases, but I don’t see Bogaert protesting OPEC.

Learn to keep a budget like the rest of us, sister. And what were you doing to help save Michigan while it burned last year? Andy Dillon was so sleep-deprived and anxiety-ridden that he dropped 15 pounds in September living off protein shakes.

It’s out of sheer ego that Drolet is hell-bent on “making history” to recall the first sitting speaker of the House. Anyone who thinks Leon, himself a victim of term limits, is content as a mere Macomb County commissioner (which evidently ain’t a time-consuming job) probably believes Mr. Perks is a real porker, too.

No, with Leon, it’s all about headlines (send me a thank-you card later) and what he wants to be when he grows up - be it a congressman or a professional anti-tax warrior with any one of the whacked-out groups in Washington.

So thanks to some wealthy, misguided donors, Drolet amassed $103,000 to boot Dillon.

It’s eerily reminiscent of plutocrats who fueled U.S. Rep. Tim Walberg’s bid in 2006, thanks to the shadowy Club for Growth lobby. It was a trip to call up his donors in the posh enclaves of Andover, Mass., and Santa Monica, Calif., and ask what they knew about Walberg, R-Tipton. None of them, of course, could pick the good reverend out of a police lineup.

Yep, that’s democracy at work.

But on Thursday, Drolet’s group turned more than 15,000 signatures, far more than the 8,427 required to put a recall on the Aug. 5 ballot. The fact that the recallers reportedly had to pay $10 a signature to job-starved, out-of-district circulators and lie that petitions would stop a 12-percent gas tax hike (which was caught on tape) once again shows the deafening clamor to dump Dillon.

Drolet’s made a lot of noise about Michigan Democratic Party “thugs” hired as petition blockers, ignoring the fact that his hired guns aren’t exactly pure as the driven snow. The Pigman has even convinced a couple naïve TV stations there’s something fishy about state employees volunteering after hours to help Dillon in the “war zone,” as Drolet calls it, when that’s standard fare during election season.

And while Drolet makes me chuckle every time he calls with more recall and anti-tax propaganda, his over-the-top metaphors comparing a chief Dillon ally to Bull Connor and raising taxes to rape makes my stomach turn.

Where we go from here depends on voters. Dillon has more than $600,000 in the bank, which will help, but groups like Grover Norquist’s Americans for Tax Reform are waiting in the wings to fill Drolet’s coffers.

Sure, the Dems will fight the petitions in court but they’ll lose, just as they did with the blatantly fraudulent anti-affirmative action ballot measure in 2006 (another Leon Drolet production). Michigan law is notoriously inept in this regard.

Dillon can beat the recall flat-out if his supporters turn out, not just the angry mob. If he loses, he can turn around and run for reelection again in November and only be out for a few months.

If either happens, Leon will forever go down as a Lansing punchline. But at least nobody’s started their own revolt to recall him - yet.

A recall worthy of ridicule

Want to mangle things even more in Lansing? Then by all means, recall House Speaker Andy Dillon.

The Redford Township Democrat epitomizes everything we need in a legislator - he's brilliant, pensive, ruthlessly pragmatic and honest to a fault (even with the press). He plays well with others, a rarity in the ego-sodden Capitol.

For most of last year, I blasted leaders for their ineptitude and crass politicking in solving a $2 billion budget deficit. No one was without fault (the media included for our sometimes shallow reporting) and I once christened Dillon the Cowardly Lion for his role in negotiations last summer.

But even with only two years of legislative experience under his belt, the speaker appeared to be the only grown-up at the table, constantly trying to lower the temperature of high-octane flare-ups between Gov. Jennifer Granholm and Senate Majority Leader Mike Bishop, R-Rochester.

Leaders on both sides of the aisle credit Dillon for the bipartisan deal that avoided a long, painful government shutdown. The price was higher income and business taxes and budget cuts.

"I'd do it again tomorrow," Dillon told me this week.

But the anti-tax fanatics want their pound of flesh.

So they're coming for Andy Dillon, the capitalist turned conservative Democratic rep, whose pro-life, pro-growth views haven't endeared him to many in his own party. He gets even less love from liberal blogs, which haven't exactly leapt to defend him against recall, too busy panting every time Granholm or Senate Minority Leader Mark Schauer burp.

Recalls almost always are a rash, partisan-soiled scare tactic. They should be reserved for those who commit gross negligence or criminal acts and refuse to step down. (Yes, Kwame Kilpatrick, that means you).

In reality, recalls are wielded as a billy club to batter lawmakers who make tough decisions. My advice? If you loathe Dillon, forget about a costly August recall. Grow up and vote him out in November.

Last year, elfin ringleader Leon Drolet declared there would be recalls by the dozens. But his right-hand woman, Rose Bogaert, now admits the Michigan Taxpayer Alliance doesn't have the money or manpower. So Dillon is the No. 1 target.

Drolet, a former GOP lawmaker, contends a sitting speaker of the house has never been recalled. "We're ready to make history!" he bloviates.

Shy and retiring, the man who drives around Michigan with a mammoth foam pig named Mr. Perks surely wouldn't be trying to ride this circus to a national job with anti-tax guru Grover Norquist (who's on his board) or a congressional seat.

I asked Drolet if he really believes Dillon spends every waking moment plotting to raise taxes again.

"It doesn't matter if I think he'll rape someone again," he told me breezily. "He has to be held accountable for the rape he did commit."

Now I like Leon, always armed with a comeback and wicked sense of humor. But he didn't back away from his incendiary statement, maintaining Dillon committed "an economic crime."

He also insisted "Dillon's thugs" are harassing his paid signature-gatherers, calling it a "friggin' war zone." When I asked if there were black helicopters hovering, the anti-tax man, for once, didn't laugh.

Perhaps more bizarrely, he told me he'd rather deal with far-out lefties in the Legislature because they'd compromise more, whereas Dillon "has to vote for every piece of the liberal agenda."

Look, Drolet was a professional flame-thrower in the House; his goal was never to govern. That's the real difference between he and Dillon, who as a freshman in the minority got the innovative $2 billion 21st Century Jobs Fund passed.

That's why GOP former House Speaker Rick Johnson is incensed over Dillon's recall and is defending him. "I voted for tax increases several times," Johnson scoffed. "Where were the zealots then? It was never an issue."

Bishop, a tried and true conservative, has offered to help in any way he can, telling me his relationship with Dillon was "one of the few positive things to come out of last year."

And the Detroit Regional Chamber of Commerce, which spent all of 2007 screaming bloody murder about a tax hike, is fighting Dillon's recall.

It's heartening to see such an outbreak of common sense. But if the recall does go on the ballot - Drolet has until May 1 to collect about 10,000 signatures - Dillon's probably toast, if history's any guide.

The speaker calls the recall a "major irritation" at a time when he's working on alternative energy legislation and fiscal 2009 budgets.

After last year's fiscal fiasco ("All the stupid machinations were an embarrassment," he sighs) Dillon briefly considered calling it quits. The Notre Dame-trained lawyer who's turned around a string of businesses could return to a blockbuster career in the private sector.

But the speaker is determined to stay put for one simple reason: "The state needs help right now."

That's the definition of a leader. Now's not the time to lose one in Lansing.

Could hope spring eternal from tax compromise?

Hail to the victors.

And in this case, that’d be Mike Bishop and his Senate Republicans.

Say what you will about the ever-tan, GQ-attired Senate majority leader (this columnist has, for the record, skewered him as the Tin Woodsman and high school Homecoming king) - but the man got it done last week.

The scorned service tax is no more, replaced by a GOP-crafted surcharge on the Michigan Business Tax. The deal went down 48 hours after all hope seemed siphoned from the Capitol.

The turning point was when Democratic House Speaker Andy Dillon on Nov. 28 caved to his caucus, which voted for a plan the Senate would never sign off on and planned to split for six days.

While the Dems’ plan wasn’t unreasonable – it was actually more fiscally responsible – their bravado unwittingly gave the GOP the upper hand.

Incensed and indignant, Bishop and Sens. Jud Gilbert, R-Algonac, and Mark Jansen, R-Grand Rapids, marched into the leadership void.

"In my eight years in the Legislature, I've never seen anything that was such a violation of trust," Gilbert seethed.

Now after 11 straight months of backstabbing, bluster and brainlessness, that’s hard to swallow. Nonetheless, negotiations nosedived to another low, paving the way for an even more agonizing budget showdown next year against the backdrop of the 2008 election.

In the end, the GOP nabbed a sunset for the new MBT tax and a lower rate while raiding a rainy day fund, their favorite pastime.

Yes, Gov. Jennifer Granholm won out on revenue-neutrality – supposedly – and furiously negotiated behind the scenes. But her motivation seemed muddled – was it to demolish a bad tax she’d once succored or to slap down Dillon, her perennial rival?

So Republicans emerged the heroes for slaying the service tax just when it seemed certain it would stay on the books.

Bishop’s power was buttressed by the bill passing almost unanimously in the Senate – despite Democrats’ yowling that they’d been shut out of the process – and by a wide margin in the House.

Though Granholm clearly won the main budget battle back on Oct. 1, those are numbers she could only dream of. Which is why the GOP keeps chanting the service tax and income tax hike are “the Democrats’ plan.”

But rather than be statesmanlike about his triumph, the bitter Bishop afterward again slammed the House, declaring there was “no excuse for any legislators to have turned their back on” the process. The governor at least gets better grades for graciousness in the last round.

Yet Bishop’s phrasing is curious. Note that he doesn’t single out House Dems, because Minority Leader Craig DeRoche, R-Novi, was (surprise) MIA in the mediation, as he has been all year.

DeRoche’s sole goal seems to be carrying water for a few whack-jobs in the state GOP and the intelligent, but indelibly ideological folks at the free-market Mackinac Center for Public Policy.

Bizarrely, this is how he justified his loathing of the deal that was practically penned by the business community: “To say (it) supports this plan is like saying that a death row inmate chooses the firing squad over the electric chair.”

Contrast DeRoche’s denial and disconnect with Bishop, who’s been a player from the beginning.

Now for the downtrodden Dems, here’s the silver lining.

The business tax hike is now a bonified bipartisan baby – 65 percent of legislators flicked the switch for it. Rather than slash spending, Senate Republicans championed a plan that hiked taxes on a core constituency.

Yeah, they spin it as cut over the sales tax – something we’ll never know for sure since the whipping boy is dead. But as diehard conservatives intone, a tax is a tax is a tax.

What this means is that right-wing interests aren’t as apt to ardently rally ‘round the Republicans next year. That could serve as a cushion for Democrats, who sprint out the gate late thanks to a botched, meaningless Jan. 15 presidential primary.

The across-the-aisle deal also could sap the wind from the sails of the recall movement, whose money and momentum was spurred by the reviled service tax.

The anti-tax zealots - who appear to worship at the altar of his immense foaminess, Mr. Perks, instead of our Lord and savior, Jesus Christ – have always hunted Dems and a few token Republicans who really irked them. Watch their fervor and funds dry up at the prospect of taking out so many of their own.

In the end, what truly matters is leaders of both parties came together and did something constructive. It wasn’t great policy and it wasn’t without ego, rancorous rhetoric or excruciating delay.

(“We’re trying to forge world peace,” Sen. Jason Allen, R-Traverse City, cracked Friday afternoon.)

Could be a start. The odds are long, but this is the season of hope, after all.

Everyone loses on service tax

“Senate Republicans are not obstructionists. We are standing up against a mammoth tax increase. This caucus stands for something.” - Senate Majority Mike Bishop, R-Rochester

So far, that something is failure.

After two months of endless bellyaching, Republicans have proven they can’t butcher a wildly unpopular tax.

The oft-slandered service tax – the part of the last-minute state budget deal instantly deemed dead on arrival - now seems poised to take effect Saturday.

Bishop hoisted the white flag Wednesday night after the Democratic-led House passed an alternate business tax and skedaddled home for the weekend.

Republicans seemed stunned they hadn’t gotten their way. After all, they’d slapped their final offer on the table – probably generously written for them by the Michigan Chamber of Commerce – but the Dems’ plan for a permanent, higher Michigan Business Tax surcharge came out of nowhere.

Faced with hardball tactics, Bishop reamed the “uncompromising, partisan” opposition.

“It is clear that the service tax introduced by the governor and carried to fruition by the House Democrats, has been their goal all along,” he sniffed.

What an incredible statement. Despite having public opinion and the entire business community behind him to ax the tax, the baby-faced Bishop admits he was outsmarted by the dynamic duo of Gov. Jennifer Granholm (as Batwoman?) and her Boy Wonder, House Speaker Andy Dillon.

Does anyone really think Bishop has the gravitas to be governor?

The epilogue to the state budget fiasco seems to be following the same script. Much of the GOP and its interest groups can’t quite grasp that they’re not running the show anymore and they need to give a little more – if they want to get anything at all.

Republicans kept congratulating themselves for considering any tax hike. But no one could really think they’d win a small boost to the MBT that died in three years and relied on raiding yet another rainy day fund.

Life’s unfair, kiddies. Minority Democrats learned that the hard way during the era of perpetual tax cuts and cuts to schools and local governments.

Now if hard-line Republicans could have stomached a slightly higher income tax back on Sept. 30, they could have gotten the last two months of their lives back. But more on that in a moment.

As for Granholm and her Democrats, they may have won a pyrrhic victory in shutting down debate. The GOP certainly seems to have acted more gentlemanly in this round and legislators are rightfully milking it for the media and business.

Dillon’s refusal to appoint a conference committee last week – the traditional path - was both bad policy and PR. Ditto the House’s shotgun vote Wednesday night.

Democrats, per usual, seem splintered. For Granholm, keeping the service tax on the books may well be the goal. She christened the idea with her ill-fated two-penny plan, after all, and economists believe the current tax will rake in far more than the $650 million estimated this year.

But Dillon’s contending with a tide of recalls - including his own – and an election for control of the House in 11 months. He’s been much more responsive to business and has pushed tweaks to the MBT in an effort to quell the clamor.

If the service tax starts up anyway, the backlash may have only just begun. That’s exactly what the GOP and Leon Drolet – its anti-tax, recall-happy pal with a big foam pig – fall asleep fantasizing about.

The truth is, everyone’s got it wrong.

The service tax stinks – it’s a capricious, cherry-picked list. And tinkering with the MBT – before it even goes into effect – could well drive business out of our state.

Leaders need to stop focus-grouping the budget. Business lobbyists testifying before Tax Policy committees act like they’re ordering off a menu (“We’ll take a 12 percent surcharge on the MBT with a side exemption for compensation”) - and some feel they’re entitled to skip out on the bill entirely.

Politicians would be better off sitting down with Tom Clay of the nonpartisan Citizens Research Council and letting him scare the crap out of them about the state’s finances, services and schools and where we’re headed.

What they need to do in the short-term is repeal the service tax and hike the income tax from 4.35 to 4.8 percent.

Then for next year, it’s time to think long-term. Bishop could show his leadership chops by championing real reforms to legislator and employee benefits and Corrections, coupled with a graduated income tax that takes a constitutional amendment, but provides a steadier revenue stream. Exploring a fairer service tax would also be prudent policy, since that’s the growing sector of the economy.

Of course, that will never happen. Constructive solutions are the enemy of the poisonous partisanship Lansing is drunk on.

And political courage always shrivels up in an election year.

If they only had a plan

After two weeks vacation, our Lansing leaders are no closer to discovering the Wonderful Wizard of Oz, who will magically solve the $1.6 billion budget deficit.

They've been stumbling down the yellow brick road since January, in fact, and still can't figure out which way to go.One path looks a lot like Dust Bowl-era Kansas — depressingly black and white, with the next twister right around the bend. Family farms are going belly-up, schools are ramshackle and downtowns are fast becoming ghost towns.

But at least the dang government is minding its own business.

The other path blooms in Technicolor — and if the gentle, wildflower-dotted hills don't quite look like Silicone Valley, it's at least Pennsylvania. After last week's partial government shutdown, the Keystone State promptly passed a budget boosting spending on schools, daycare and senior services.

Imagine that.

Of course, Michigan can just run out the clock until its Sept. 30 deadline. What's the worst that can happen? Record 7.2 percent unemployment? The continued exodus of business and bodies from our state?Stall on, Lansing. Budgets are hard work. And our leaders clearly don't like being on the surrealist journey together.Everyone's jockeying for first billing in this melodrama.

Gov. Jennifer Granholm plays Dorothy, the heavily rouged Democrat who thinks there's no place like home in Wayne County, where the McNamara machine would just take care of pesky tax questions for her.Senate Minority Leader Mark Schauer is Toto, Dorothy's loyal sidekick, cute enough to fit into a picnic basket. Occasionally, the Bedford Township Dem pokes his head out to nip at Senate Majority Leader Mike Bishop.

Bishop, R-Rochester, stars as the Tin Woodsman in need of a heart, who thinks nothing of slashing college funding and medical care for poor kids.

Is he trying to appease the Wicked Witch of Notaxistan lobby, whose Flying Monkey, former state Rep. Leon Drolet, hounds legislators with his gigantic, fiberglass pig? Or are dreams of the governor's mansion dancing in the boyish Bishop's head?

The Cowardly Lion is novice House Speaker Andy Dillon, D-Redford Township, who clearly needs a shot of courage after going into hiding during the last round of negotiations.

Lastly, there's easily overlooked House Minority Leader Craig DeRoche, aka Scarecrow, who still wistfully calls himself Speaker and can't add up the deficit right. The Novi Republican is just now cobbling together a task force to help him out.

Like it or not, this preening cast of characters is stuck with one another.And we're stuck with them.But if they need help, there's not just one Wizard to consult — there are a dozen from the bipartisan Emergency Financial Advisory Panel, chaired by former governors William Milliken and Jim Blanchard.

They put forth sensible ideas the overwhelming majority of Michiganders support — investing in schools, the arts and health care; modernizing the tax code; and reforming state employee benefits.Precious little of that has been done — save for the new Michigan Business Tax — even as an F-5 economic cyclone barrels through the state.

Now I lived in Iowa long enough, surviving three separate tornadoes, to know that if you choose to shut your eyes in the middle of a twister, it'll still heave your mangled body onto the nearest barn or farming implement.

Our problems aren't going away. The storm grows stronger each day.

But our leaders seem content to keep using the budget as political theater, knowing they can always take cover in their tax shelters.

Right now, too many in Lansing see the world in black and white. It's up to us to tell them we'd rather live in Technicolor.

High school attitude ruling the State House

Washington may be Hollywood for ugly people, but it's the bickering beautiful people who reign today in Lansing.

The Capitol is at the mercy of the callow cool crowd from high school — the jocks, cheerleaders and Future Business Leaders of America who made sure their mugs were splattered on every yearbook page.

But they never really did anything.

That's not going to fly in Michigan right now.

We hold the embarrassing distinction as the only state with a negative credit rating from Standard & Poor's, because smug legislators slew the $1.9 billion Single Business Tax last year without bothering to replace it.

Right now, we're running out of time to plug a $900 million hole in this year's budget. And then it's off to tackling the $3 billion shortfall projected for next year.

What Michigan needs right now is leadership.

We didn't get it Thursday.

No, instead we're treated to the tiresome antics of Senate Majority Leader Mike Bishop and Gov. Jennifer Granholm, our very own homecoming king and queen sparring for the spotlight on the tacky gymnasium stage.

On Feb. 8, the immaculately-coiffed Democratic guv smiled at the crowd, trumpeting her budget plan complete with a $500 million business tax cut and a 2-percent tax on services.
Sniggering Republicans said they'd think about it, while House Minority Leader Craig DeRoche slapped a "Kick Me" sign on beleaguered Budget Director Bob Emerson's back.

Granholm, fresh off a landslide victory for her final term, still seems oddly paralyzed by Sally Field syndrome. She'd rather have people like her than make tough decisions in a truly comprehensive plan to save the state.

On Valentine's Day, the aqua-eyed Bishop dumped Granholm YouTube ninja style, announcing the GOP-led Appropriations Committee had rejected her executive order out of hand.

Mike felt betrayed by Jen, who would never return his calls. And he wanted his Duran Duran tape back.

The next week, Bishop proclaimed he'd solved the budget crisis sans tax hike in his super-secret plan, evidently ditching that day of history class on Richard Nixon's fictitious one to get U.S. troops out of Vietnam.

Bishop's main goal isn't to solve this fiscal train wreck. He'd rather tag Granholm with this mess and coast to the governor's mansion in 2010 John Engler-style.

Waiting in the wings is House Speaker Andy Dillon, the slick-haired student body president who's friends with everyone. He flirts with Jen in calculus but still cracks open a beer with football buddy Mike after practice.

Leaving the role of Granholm's cheerleader to Senate Minority Leader Mark Schauer, Dillon came out last week with ideas no one can argue with, such as cutting legislator benefits.

Courted mercilessly by both sides, the Democrat clearly is relishing his role as the decider. He's willing to cut more services than Granholm but raise taxes more than Bishop — as long as the final compromise won't jeopardize his control of the House next year.

By the end of last week, the homecoming king had stopped talking to the student body president, and both were miffed the homecoming queen had jetted off to Germany.

Thursday, Granholm issued her executive order with $344 million in cuts. Bishop had already determined she didn't go far enough and led the Senate effort to slash schools by $34 per student. They're no closer to a deal.

And so the political posturing goes.

The frustrating part is that it doesn't have to be this way.

Ambitious, astute and all under 50, the Capitol cool crowd isn't wonting for talent. As a reporter, I've found all three eager to talk policy; where they falter is in solutions.

With only 14 years combined state budget experience, the trio needs to book some serious time with the old bulls who have been through this before. Say, the tragically underused members of Granholm's own bipartisan Emergency Financial Advisory Panel.

They might not look as pretty on TV, but they know Michigan has to reform employee benefits, invest in higher education and restructure outmoded taxes to build a better budget and a stronger state.

One thing is clear: The longer our leaders wait, the worse things get.

Entrepreneurs are refusing to set up shop in a state lacking a clear business tax structure. Poor children don't know if they'll still have health care. Students wonder if their schools can afford to stay open. Prison guards don't know if they'll have jobs.

Granholm, Bishop and Dillon have to decide if they like playing politics or if they love this state.

It's one or the other.

Ten million Michiganders await their answer.