Michigan is teetering on the brink of insolvency, but it's taking a long time for our leaders in Lansing to do something about it. How come?

It's a rich mix of motivation, ranging from fierce partisanship to rigid ideology to the power of special interests to outright inexperience. But a big part of it is simple: Fear.

A powerful and irrational fear in Lansing today is a widespread belief that a legislator who votes for a tax increase of any sort will be recalled.

It stems from a series of events that took place nearly a quarter of a century ago, when former Gov. James Blanchard signed a law raising the state income tax, which resulted in the recall of two Democratic state Senators. Republicans have controlled the state Senate ever since.

The story is so important in the minds of many decision-makers in Lansing that it's worth while retelling the tale and looking clear-eyed at the lessons that can be learned from it.

When Blanchard was elected in November, 1982, things were grim in Michigan. The auto industry was in the tank. The unemployment rate had peaked at 17%. Interest rates were high and Michigan had the lowest credit rating in the nation. State government faced an enormous budget deficit.

Blanchard cut spending by $225 million (that's around $480 million in today's dollars) and delayed payments to try to cover the cash shortage. He also convened a financial crisis advisory panel that concluded that spending cuts alone could not get the job done. So Blanchard called for a tax increase in his State of the State speech, and on March 30, 1983 he signed a temporary 38 per cent increase in the income tax, from 4.6 per cent to 6.35 per cent, saying the tax hike was necessary "to rescue the state from bankruptcy."

Critics howled. They focused their anger on two newly elected Democratic state Senators, both narrow upset winners in marginally Republican districts: Phil Mastin, a three-term state House member from Pontiac and David Serotkin, from Mount Clemens. Fanned by conservative talk radio and grass roots organizing, recall petitions were successfully circulated in both districts. On November 22, 1983, both Mastin and Serotkin were overwhelmingly recalled and the GOP took control of the state Senate.

Blanchard's favorable ratings dropped from 60 per cent to 30 per cent. But a ballot proposal in 1984 that would have rolled taxes of all kinds back to where they were in 1981 was handily defeated. And Blanchard he went on in 1986 to defeat Wayne County Sheriff Bill Lucas by the greatest margin in Michigan history, 68-31; polls showed he could have defeated any Republican candidate.

When I asked Blanchard what lessons could be drawn from his tax increase, he was forthright: "Everybody recognized that something had to be done about revenue, even though a lot of people were mad about the tax increase. The big political mistake was not going after the recall petition drive once it got started - challenging the signatures and so on. Once the recall got on the ballot, Mastin and Serotkin were toast."

David Serotkin has passed away, but Phil Mastin is enjoying his retirement in Fenton. What would he have done if he had it to do all over again? "I'd have made a much stronger effort to achieve bipartisan support. It's hard to mount a recall drive when there are lots of votes from both sides of the aisle."

Pat Harrington is a knowledgeable Lansing lobbyist who was a Democratic House member in 1982 when he voted for temporary tax increase proposed by Gov. William Millilken. He lost a bid that fall for a Senate seat in Monroe County to a candidate who had a license plate that read, "NOTAX". "Voting for a tax increase doesn't necessarily mean you face certain recall," he says. "You have to do your homework, set out the alternatives and make the case. But you cannot do it just talking about tax increases. You have to combine that with real expenditure cuts."

So does a legislator who votes for a tax increase automatically get recalled? There's no doubt that a vote for a tax hike gives opponents a great big political opening. But getting bipartisan cover is extraordinarily important. Former Republican governor William Milliken arranged bipartisan support for tax increases without much political damage. And even Blanchard, who faced so much initial heat for his tax increase, ultimately was re-elected.

It's particularly hard to get bipartisanship on tax matters in Lansing these days, since some lawmakers have signed "no tax" pledges and anti-tax groups run around with "Recall" posters in their hands.

There's a Grand Bargain available, laid out perfectly well by a bipartisan emergency financial panelists, including Blanchard, in a report to Gov. Jennifer Granholm earlier this year. Cut government expenditures big time (including some symbolic ones like judges' cars and perks for legislators) and modernize the state tax system to reflect the 21st Century economy.

In negotiating pragmatic solutions to our present financial crisis is, our leaders have to put everything on the table. In that climate, the no-tax dogma is terribly rigid and represents a misreading of history.

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Phil Power is a longtime observer of politics, economics and education issues in Michigan. He would be pleased to hear from readers at ppower@hcnnet.com. Phil Power is president of the Center for Michigan. However, these opinions and others expressed in Phil Power's columns are individual opinions and do not in any way represent official policy positions of the Center for Michigan.