Tuesday, January 21,1986/The Battalion/Page 9
World and Nation
State tax cuts
Shrinking revenues force budget reductions
Associated Press
WASHINGTON — After a wave
of tax cutting last year, few states are
looking for more reductions this
year and legislatures in some states
are facing no-growth budgets or
spending cuts in the face of eco
nomic hard times.
An Associated Press survey of
state legislatures convening this
month snows that state coffers are
reflecting the uneveness of the econ
omy. Booming states like Massachu
setts and California are flush with
surpluses, while farm-belt, oil-pro
ducing and other economically
hard-hit states are looking for ways
to cut spending.
“It’s a very bleak picture. It makes
me depressed to review it,” said state
Sen. Hinton Mitchem of Alabama,
where Gov. George C. Wallace is
proposing a 4.5 percent cut in
spending by most state agencies in
the budget for fiscal 1987.
Louisiana Gov. Edwin Edwards
said, “We will lose 10,000 state em
ployees, and that means a blow to
services. The poor will suffer, the el
derly, the mentally ill — all those
who can least afford to lose services.”
But in California the state’s gen
eral fund budget is in for a 7 percent
increase, prompting Gov. George
Construction
worker wins
$30 million
Associated Press
NEW YORK — State officials
announced today that a 59-year-
old construction worker was the
winner of a $30 million Lotto
jackpot, the second-largest indi
vidual prize in U.S. history.
Pasquale “Pat” Consalvo of
Staten Island, who has been mar
ried for 37 years and has three
children and three grandchil
dren, said at a news conference
that he planned to spend the
money on his family.
But when asked what he
planned to do first, he said, “Go
home and lay on my couch.”
Rest was necessary, Consalvo
explained, because he and rela
tives had been partying contin
uously since they learned that he
had won Saturday night.
Lottery Director John D.
Quinn said the top prize sur
passed New York state’s previous
individual record, $20 million
paid to Venero Pagano, a 63-
year-old retired carpenter who
formerly lived in the Bronx.
Pagano, who hit the jackpot in
July 1984, now lives in Florida,
Quinn said.
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“It’s (the budget) a very
bleak picture. It makes me
depressed to review it. ”
— Alabama state Sen.
Hinton Mitchem.
Deukmejian to boast, “California has
gone from IOU to A-OK.”
Searching for money-raising al
ternatives to more taxes, Florida,
Louisiana and West Virginia are
considering allowing gambling casi
nos. Kansas is considering legalizing
betting on horse racing.
Nationwide, the states are project
ing at least $2.8 billion in total sur
pluses, with California’s $1.16 billion
the largest. Others include Massa
chusetts at $500 million, Illinois with
$200 million, New Jersey with $190
million and Virginia with $302 mil
lion.
But projected deficits amount to
at least $1.7 billion. Half that is in
Minnesota, with other big shortfalls
forecast in Florida, Kansas, Okla
homa and Wisconsin, and smaller
ones in South Carolina and Utah.
In some cases, tight budgets di
rectly follow enactment of tax cuts.
Last year, 20 states lowered taxes
worth more than $1 billion, accord
ing to Steven Gold, fiscal director for
the National Conference of State
Legislatures.
Among them was Minnesota,
which cut its income tax 16 percent,
or about $915 million. This year,
Minnesota has the biggest projected
budget shortfall among the states —
as much as $915 million.
Other states facing budget cuts in
clude Hawaii, Iowa, Kansas and
Louisiana; no-growth budgets
expected in Illinois and West
ginia.
are
Vir-
Kansas Gov. John Carlin has pro
posed a 1 percentage point boost in
the sales tax. Excise taxes on gasoline
or cigarettes are proposed in Colo
rado, Virginia ana Washington.
In California, repeal or changes in
the unitary tax on corporate profits
is being proposed. Connecticut,
Pennsylvania and Michigan, all with
surpluses, may consider tax cuts. In
New York, the second year of a ma
jor tax-cut program will bring about
$1.1 billion in cuts, and while Gov.
Mario Cuomo says there is no sur
plus, Republican legislators want to
cut taxes more.
Eastern attempting
to ward off creditors
Associated Press
MIAMI — Eastern Airlines said
Monday it will lay off 1,010 flight at
tendants and cut the pay and priv
ileges of the remaining 6,000 in an
effort to ward off creditors’ threats
to declare default on its $2.5 billion
debt.
The attendants’ union said an “all-
out war” had been declared.
“It is absolutely essential to get
this company back on the financial
footing it needs,” said company
President Joseph B. Leonard, add
ing that Eastern hopes to eventually
recall the furloughed attendants.
The layoffs of attendants with less
than five years seniority will be effec
tive Feb. 4, along with a 2 percent
pay cut on top of an 18 percent wage
reduction instituted two years ago,
Leonard said. Other employees also
will eventually be affected, he said.
Eastern will maintain its flight
schedule, he said.
Leaders of Transport Workers
Union Local 553 had predicted the
layoffs and had expected pay cuts of
up to 33 percent.
Local president Robert Callahan
vowed earlier Monday to fight the
action.
“Since it is a fight you want, we
will fight you ... in the boardrooms,
in the banks, in the media, on Wall
Street and with the public . . . and
maybe in the streets,” Callahan said.
“It’s all-out war.”
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He would not specify what action
the union would take, promising
only that workers would not strike
before March 1. The attendants’
union has no contract and no fur
ther talks were scheduled with East
ern, which has a total of 41,000 em
ployees.
Earlier this month, Eastern’s cred
itors ordered the Miami-based air
line to get major labor concessions or
face default on its $2.5 billion debt to
about 60 lenders.
Eastern hopes to save an esti
mated $250 million by the end of
1986 from the layoffs and wage cuts,
Leonard said.
“This is what it’s going to take to
preserve their jobs,” Borman said.
Besides pay cuts for attendants,
the company said it is cutting their
travel allowances and vacation time,
eliminating extra pay for interconti
nental flights and requiring them to
work more time at no additional pay.
Flight attendants now average 50
to 63 hours a month in the air. East
ern officials say they will be required
to work 80 hours a month starting
Feb. 4.
In 1985 the average flight atten
dant made $30,464. Under the new
plan, they will make 2 percent less,
Leonard said.
That is in addition to an 18 per
cent payroll deduction the three ma
jor unions took in 1984 in exchange
for 25 percent of the company’s
common stock.
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