LANSING - Some Democratic members in the House urged the governor to sign legislation repealing the single business tax before she ended up vetoing it late last week.
Sources who asked not to be identified have told Gongwer News Service that at least one Democratic House leader met with the governor's staff beforehand to request Granholm's signature so that she could have stolen an issue away from Republicans in a campaign year - tax reform (to the business tax that everyone, including Granholm, seems to agree needs to be fixed) - and then come out with her own proposal or forced the Legislature to work on a replacement of the tax over the spring break.
Republicans who are using the value-added tax to demonstrate how Michigan is in a "single-state recession" this election year are now moving full speed ahead with a petition drive sparked by Oakland County Executive Brooks Patterson that, should he get the required number of signatures, would create a legislative initiative to repeal the tax that bypasses the governor's desk.
Granholm in her veto message said that she did not sign the legislation because there was no guarantee that education, health care and public safety would be protected should the state repeal its $1.8 billion revenue stream.
"Pass a bill that also guarantees that businesses will pay their fair share of taxes without forcing Michigan families and citizens to shoulder new tax burdens," she wrote. "That is a solution I can support. That is the solution Michigan needs and deserves."
Republicans say they plan to find a replacement to the tax, but would have had 21 months to debate what that will be under the proposed sunset. Democrats who represent marginal districts in the House voted in support of the legislation twice, with three additional lawmakers from Detroit approving a Senate substitute.
Democrats tried to amend the legislation to ensure the replacement tax would not affect Granholm's three stipulated areas of importance, as well as require that a replacement be named before a sunset.
One source said the meeting between the Democratic leader and Ms. Granholm's staff was fruitless, and the lawmaker left concerned that the governor did not seize upon this strategic opportunity.
However, another source said the exchange was merely healthy discussion between Democratic leaders and showed that the veto and majority of Democrats who voted against the legislation are on the same page.
Heidi Watson, spokesperson for Granholm, confirmed Democratic leaders did meet with the governor, but said the discussion with her was only about roads and high school curriculum.
Several sources also said they did not believe Mr. Patterson's petition drive would meet the required amount of signatures by the end of May, as his fundraising efforts have taken longer than he hoped.
Opinions vary within legislative Democratic ranks on how this veto will affect Ms. Granholm going into an election.
Some said understanding of the issue, perhaps minor to the general electorate at this time, will grow as Republican gubernatorial candidate Dick DeVos and Republicans tie the issue to the state's massive job loss, particularly in the manufacturing sector where much of the SBT revenue comes from, though they also estimated that it would not be the defining argument in the campaign and that Ms. Granholm has been the only governor to propose fixing the tax system.
Other sources also said Granholm made the right decision by not signing a repeal without knowing what a replacement would be.
In some respects that position backs comments made by Chuck Hadden of the Michigan Manufacturers Association, who said on Friday that while the SBT has a stigma, his members "like the devil they know rather than the one they don't know."