By John Lindstrom
Publisher
Posted: September 7, 2017 3:28 PM

Hey, this reporter first tripped into the Capitol complex 40 years ago this week, when Knapps was still a real department store and the lobbyists lunched at Dines, which means he’s been waiting for a commutation from the governor longer than a good share of the current crop of legislators have been drawing breath.

So this reporter gets to share a memory. Because once he plopped into his office chair on the ninth floor of what was then the Michigan National Tower, his superiors decided, “Hey, he’s new, he’s young, he’s dumb, let’s have him cover the SBT revision.”

The SBT for those who have mercifully forgotten or never knew was the Single Business Tax. It was the first purely value added tax in the United States. When it was finally euthanized about a decade ago it was the only value added tax in the U.S. It replaced more than a half-dozen business taxes – including an inventory tax which meant that store shelves often looked like Soviet empty shelves the day before inventories were completed (“Your kids are hungry, lady? Too bad, come back after the inventory assessment.”) – into a single, get it?, business tax.

The biggest moan about the tax was if a company lost money it still had to pay taxes. Of course, most businesses didn’t pay the tax because they weren’t big enough. The vast majority of the taxes were paid by fewer than 100 companies in the state. Guess who they might have been.

But the advantage of the SBT was it provided revenue stability for the state, especially during recessions. Which we had a lot of.

Anyway, after the SBT was enacted in 1975 problems were discovered that needed fixing and this stalwart young lad was thrown into the byzantine labyrinth of obscure tax policy to report upon. A few weeks before I was covering horse shows at kids’ camps and now I was trying to describe to readers the ferocious committee debates on whether to use jewelry store or grocery store assumptions for assessments. Pay me $50 cash and I’ll tell you what that means.

The one advantage of that assignment was that I got to watch some real legislative mastery. Both the House and Senate were controlled by Democrats then. No really, they were. Seriously, Democrats controlled both houses. Look it up. Of course, it was also pre-term limits, and young ’uns, no offense to the current 146 but they got nothin’ on the lads and lassies of the 79th Legislature. Those lawmakers had time to study up on issues and committee meetings were almost like stepping into intellectual salons as Democrats and Republicans dissected, debated, parsed and postulated on various nuances of every issue.

And they were matched by then-Governor William Milliken, a Republican, who was, and is, smarter than a fox and twice as wily. He was represented in the committee trenches by Management and Budget Director Gerald Miller, nicknamed Dr. Strangetax, who probably had memorized Mathus’ classic text, “Principles of Political Economy.”

Chairing the House Taxation Committee was Rep. George Montgomery of Detroit. He was old, he needed a cane, he chain-smoked Pall Malls, his voice was raspy, if he thought you were a son of a bitch he made sure you knew it every time he saw you, and he was a genius. He understood everything on taxes, tax law and legislative procedure. Few before him and almost no one since him could match him on those subjects.

Chairing the Senate Finance Committee was Sen. Patrick McCollough of Dearborn. He was young, sharp though not as well versed in taxes as Mr. Montgomery, and ambitious. He was gunning for the Democratic nomination for governor in 1978 and saw changing the SBT as a big political leg up on the opposition and put him in a good spot to run against Mr. Milliken that year. And he sponsored the bill that would eventually become law altering the SBT. It doesn’t hurt to know that the two tax committee chairs were not really friends.

The actual fight on the legislation is not the point of the story. A compromise was reached and a bill presented to Mr. Milliken for signature.

For the signing ceremony in Mr. Milliken’s relatively compact office in the Capitol, Mr. Milliken was at his desk, flanked by Mr. Montgomery and Mr. McCollough on either side. Rep. Martin Buth, who sadly died a few weeks ago, the Republican vice chair of Taxation and Mr. Montgomery’s best friend was also there as was I recall, as was Republican Sen. Bob VanderLaan, and of course Mr. Miller.

Mr. Milliken carefully scanned the bill, signed his name, checked his watch and put the time down. Remember, this bill was sponsored by Mr. McCollough.

As Mr. Milliken made a show of capping his pen, he looked down at the bill, and said, “I think I will give this bill…” And Mr. McCollough was all smiles, he stepped forward, his hands were out.

“To you, Rep. Montgomery,” Mr. Milliken said, and he swept the bill off his desk, turned in his seat and handed the bill to Mr. Montgomery, “to thank you for the outstanding work you’ve done on this important issue.”

For an instant Mr. Montgomery was dumbstruck, leaning on his cane, his hand shaking a little as he took the bill. His eyes kept motioning towards Mr. McCollough who had dropped his hands, stepped back with a frozen smile and furious look in his eyes.

In fact, everyone present wondered if the governor somehow got confused. But then we and Mr. Montgomery suddenly caught on to what was happening. Mr. Milliken was stiffing his potential opponent, right there with reporters watching and cameras rolling. Mr. Montgomery grinned so wide his teeth were in danger of falling out as he thanked Mr. Milliken and all the while he looked at Mr. McCollough with a “lookie here sonny boy” gleam.

It was Mr. Buth who said, “Governor, I believe Sen. McCollough also deserves some credit.” And Mr. Milliken whirled in his seat and looked up at Mr. McCollough in complete surprise.

“Why senator!” he said, “of course.” And he dashed off his signature, handing the bill off, saying, “And thank you for …all of your efforts as well.”

Mr. McCollough made his remarks. Mr. Milliken looked at him with an expression that said, “Ah ha, yeah, sure kid,” said thank you when Mr. McCollough finished, then whipped around back in his chair, saying , “Thank you again, Rep. Montgomery.”

The proceedings concluded, Mr. Milliken slipped into the side offices. Mr. McCollough stepped up to the reporters. Mr. Montgomery stood in Mr. McCollough’s sightline, carefully looked over the first signed copy of the bill, then slowly creased it and put it in his coat pocket. It didn’t matter that Mr. McCollough was on camera, he watched Mr. Montgomery through the whole procedure.

This reporter went back to his manual typewriter and thought, “This covering the Legislature could be fun on occasion.”