Tax
Reagan to
By OWEN ULLMANN
Associated Press Writer
WASHINGTON President Reagan plans to
ask Congress in his State of the Union Message to
overhaul and simplify the federal income tax
code by lowering rates and narrowing
deductions, administration sources said
yesterday.
The proposal, described by one,official as long
term "major tax reform," is expected to be one
of the major themes in the address Reagan will
make to a'joint session of Congress on Jan. 25,
according to the sources, who did not want their
names used.
The sources said Treasury Secretary Donald T
Regan has been pushing the idea within the
administration and has urged the president to
embrace it.
Cabinet OKs sub-minimum wage plan
By MERRILL HARTSON
Associated Press Writer
WASHINGTON President Reagan decided
yesterday to propose a "sub-minimum wage"
under which businesses could pay teen-agers
$2.50 an hour 85 cents less than the current
minimum wage administration sources said.
The lower wage could be paid only for summer
jobs.
The proposal, debated and approved at a
Cabinet council meeting, is one of several
administration initiatives which officials hope
will curb high unemployment, according to the
sources.
These sources, who insisted on anonymity, said
sub-minimum wage jobs would be available to as
many as a half-million teen-agers, but only
during the summer months. This limitation
apparently is designed to head off stiff opposition
State: College: A town still operating in the black
Editor's note: This is the first of a two part
series examining how State College has
stayed on a sound fiscal course while many
municipalities are suffering from an urban
fiscal crisis.
By TONY PHYRILLAS
Collegian Staff Writer
The talk in the offices of municipal
officials across ,the country is of an urban
fiscal crisis many cities are already
deeply in debt, others are on the brink of
bankruptcy.
Municipalities everywhere are cutting
back services, reducing work forces, and
having a difficult time balancing their
budgets.
A survey of 79 municipalities, released
last month by the National League of Cities,
concluded that cities across the country are
suffering from "extreme fiscal stress."
But the urban fiscal crisis seems to have
bypassed State College; the borough began
1983 on a sound fiscal note with a large
budget surplus and without the need to cut
Collegian selects new executives
Cassidy, Smith chosen new , editor in chief, business manager
Judith A. Smith
code may get overhaul
ask Congress to
back programs or raise taxes.
And while many municipalities some
here in the Centre Region = are having a
difficult time balancing their budgets, State
College's budget• figures were a pleasant
surprise to local officials.
In fact, for a brief period last year, the
talk among State College Municipal Council
members was of decreasing taxes, though
that idea was finally ruled out.
Is State College immune from the urban
fiscal crisis?
No, says municipal manager Carl B.
Fairbanks, the man who has put the
borough's budgets together for the past 13
years. •
However, State College does seem to fare
better than most municipalities in bad
economic times because it takes a while for
economic fluctuations to the area, he
added.
"We're more immune than many other
communities especially the ones based on
an industrial economy," Fairbanks said.
"We tend to have a more steady
employment scene because the economic
By CHRIS KAY
Collegian Staff Writer
Suzanne M. Cassidy (Bth-journalism) and
Judith A. Smith (Bth-advertising) were
unanimously selected editor in chief and
business manager of The Daily Collegian by
the Board of Directors of Collegian Inc. last
night.
Cassidy, now town editor, will succeed Phil
Gutis and serve as editor in chief from Spring
Term through Fall Semester 1983.
"As editor, I would like the Collegian to take
an active role in moving the University ahead
through the period of transition we have in
front of us," Cassidy said.
A Collegian philosophy in writing is
necessary, she said, because "the staff
members need to know what's required of
them."
"It is important to put out the best product
that we can while teaching the staff to be
accurate, responsible, and dedicated."
Also, Cassidy said she would like to see each
reporter's motivation increase and writing
quality improve.
"One of the best ways to improve a reporter
is to urge him to look beyond the basic story,"
Cassidy said. "Also, I think it is important to
notify your reporters if they do a good or bad
job."
Most importantly, Cassidy would like to see
staff members cooperate with one another.
the
daily
lower rates, narrow deductions
Asked yesterday if Reagan had gotten behind
the the tax proposal, Regan told reporters, "I
don't know . . . The president has not given me
his final decision in the tax field, nor would I
comment further on what suggestions I make to
him."
However, during a speech to a business
'conference sponsored by The Washington Post,
Regan called for "streamlining and simplifying
the federal tax structure" to strengthen and
expand the nation's economic base. He added
that "only the well-to-do can afford the lawyers
and accountants" needed to figure out the
current complex tax code.
Regan also said that "any serious attempt to
reform that code will bring out special interest
groups like flowers bring out. bees."
The officials said Reagan has no specific plan
in mind, preferring instead to develop some firm
by congressional Democrats and organized
labor.
The current minimum wage, for adults and
teen-agers both, is $3.35 an hour.
The AFL-CIO has opposed any lowering of the
minimum wage for youths, saying any such move
would encourage businesses to replace older -
workers and heads of households with teen-agers
at the lower labor costs.
The 15 million-member labor federation has
argued that 'any change in the minimum wage
law should upgrade the pay scale, which was has
been frozen at its current rate since Jan. 1, 1981.
Labor Secretary Raymond J. Donovan, who
has been pushing for the sub-minimum wage
option, could not be reached for comment.
But in a recent interview published in
Conservative Digest, Donovan said, "I will
propose to the White House that we talk about a
sub-minimum wage strictly for the summer for
olle • lan
stability of one of the basic industries here,
the University, tends to fluctuate slowly."
The figures for this year's $6.5 million
budget - 7 the largest in State College's
history added up very well, Fairbanks
said.
An initial $662,000 surplus left over from
the 1982 budget was twice the surplus left
after 1981 and the largest Fairbanks has
worked with since assuming his present
position in March, 1969.
Although about half the surplus has
already been committed to balance the 1983
budget and set aside for an emergency fund,
the borough still has about $305,000 in
surplus funds available.
Fairbanks attributes the borough's 1982
fiscal success to a number of events
including high returns on investments,
improved tax collecting methods and some
unexpected one-time revenues.
About $250,000 from last year's budget
Went unspent; half of that savings resulted
primarily from the borough's inability to fill
seven vacancies in the,police force.
Because of the timetable involved when
"It is time that the Collegian staff starts
working together to make sure that not only
will there be a quality newspaper out
tommorrow," she said, "but that the
Collegian will still be able to produce quality
papers five or ten yeas from now."
Other applicants for the editorship were
Brian Bowers (Bth-journalism) and
Jacqueline Martino (9th-journalism).
Smith, who ran unopposed, follows Paul
Rudoy as business manager. Her term also
will run from Spring Term through Fall
Semester 1983.
Smith, assistant business manager, said she
would like to see the rapport among the
various Collegian departments improve.
"I'd like to accomplish a lot of
communication between the business
manager, the board of managers, the editors
and their staffs," she'said.
Smith emphasized that business staff
managers should be more dedicated.
"Managers need to put more time in,"
Smith said.
She suggested time cards be used to ensure
that managers work at least 12 hours a week.
In'addition, Smith said she will concentrate
on staff morale.
"I think it is very important to keep every
staff member involved and feeling like an
individual," Smith said. "I also think by
keeping the staffs motivated, we can function
more efficiently."
proposals with Congress. But they said the thrust
of his thinking is along the lines of proposals that
have become known as "flat-rate" income tax
plans.
Under these plans, personal income tax rates
are lowered but the amount of income subject to
taxation is increased because of a narrowing or
elimination of deductions, such as for medical
expenses, state and local taxes, mortgage
interest payments, business-related expenses,
charitable contributions and a variety of
miscellaneous items.
Members of Congress have expreSsed general
interest in overhauling the tax system in such a
way. Politically, however, there is serious doubt
about whether Congress would be willing to
eliminate such popular deductions as mortgage
interest payments on homes, interest on tax-
exempt municipal bonds and similar items
16- to 20-year-olds. Our studies indicate that a
sub-minimum wage for the summer would
employ between 900,000 and 600,000 youngsters."
The sub-minimum wage was approved at a
meeting of the Cabinet Council on Economic
Affairs, the sources said. It includes Donovan,
Treasury Secretary Donald T. Regan, and
Martin Feldstein, chairman of the President's
Council of Economic Advisers, and David A.
Stockman, director of the Office of Management
and Budget.
In anticipation of the White House move, Lloyd
Mcßride, president of the United Steelworkers of
America, said a sub-minimum wage for teen
agers would "encourage the replacement of adult
jobholders, who have the responsibility of
supporting themselves and usually families."
John Tysse, a labor law attorney with the U.S.
Chamber of Commerce, said - the chamber for
some time has supported the concept.
President Reagan addresses the American Farm Bureau Federation in
Dallas. In his address, Reagan announced several plans to help the farmers.
the vacancies occured early last year, the
police department operated seven officers
short for almost six months, saving about
$130,000.
Another unexpected source of income was
the continuation of higher state
contributions for highways, netting the
borough $115,000 more than anticipated.
And although high interest rates were
causing problems for the average
consumer, the borough came out ahead last
year by investing when rates were at 16
percent. This more than doubled the
expected return on investment, from $40,000
to $83,000.
The borough also received a substantial
increase in federal revenue sharing funds
over last year. About $90,000 more federal
dollars will reach State College this year
due to new population and taxation data.
The total can be translated into more than
2 mils of savings in real estate taxes,
Fairbanks said.
And a major indirect contributor to the
surplus was the first allocation of
Community Development Block Grant
;
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Photo by Paul Chlland
Suzanne M. Cassidy
Thursday, Jan. 13, 1983
Vol. 83, No. 103 16 pages University Park, Pa. 16802
Published by students of The Pennsylvania State University
money to State College, which allowed the
borough to spend federal money on several
projects that normally would have been
funded from the budget.
"If we didn't have the CDBG money last
year, we would have done about $200,000
worth of projects out of our regular budget,"
Fairbanks said.
Some of the grant money was used to
rebuild borough streets, construct curb cuts
at downtown intersections, and repaint and
do outside work at the State College Senior
Citizens Center.
Though many other municipalities have
eroding tax bases and problems collecting
taxes, the borough fared well in both
categories.
State College showed a 97 percent
collection rate of borough property taxes
last year and a $55,000 increase in income
tax earnings over what was anticipated.
"The combination of all these unexpected
funding sources left us with money which
was sufficient to meet the increased cost of
providing the same level of service,"
Fairbanks said.
inside
0 Incoming University Presi
dent Bryce Jordan will visit Penn
State early next week Page 2
o Because of the University's
switch to semesters, some
apartment owners and managers
may ask tenants to move out
before their leases expire. Page 9
• The men's basketball team
will face top ranked West Virgin
ia of the Atlantic 10 Conference
tonight at 8:10 in Rec Hall
• Attorneys for ABC are de
termining a course of action in
an alleged violation of federal
copyright laws involving video
cassette recordings of the Sugar
Bowl Page 16
weather
Partly to mostly cloudy today
with a chance of snow showers
and a high of 30. Cloudy tonight
with, light snow developing later
and a low of 22. Cloudy tomor
row with rain or snow and a high
near 36.
—by Craig Wagner
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