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Press-Republican. (Plattsburgh, N.Y.) 1966-current, April 15, 1989, Image 1

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The Hometown Newspaper of Vol. 96 — No . 226 ^Copyright 1989, The Press-Republican Plattsburgh, N.Y. 12904-, Saturday, April 15, 1989 Suggested Price: 35 c 56 Pages ^j . . Photo Edifor/Ddve Paczak New citizens: Clinton County Court Clerk Terry Gordon, right, leads the United State's newest citizens through their oath of allegiance during naturalization ceremonies Friday in the courtroom of New York State Supreme Court Judge Dominick Viscardi. This group of 36 was the largest ever naturalized in Plattsburgh. The people come from Turkey, Bulgaria, Pakistan, Dominican Republic, Phillippines, Canada, Iran, West and East Germany, United Kingdom, Vietnam, Egypt, Jamaica, Korea, Yugoslavia, Mexico, India, Greece and Chili. Inflation fears eased by March wholesale prices High court tells states to tax U.S., state pensions the same By JUDY DAUBENMIER Associated Press Writer LANSING, Mich. (AP) - A U.S. Supreme Court decision ordering states to tax federal and state pensions equally or not at all could mean an $800 a year savings for the Michigan man who filed the lawsuit, but a billion-dollar headache for 21 states. Virginia, home to 200,000 fed- era 1 civilian and military retirees, is hardest hit with a $150 million a year tax loss because of the lawsuit won by a retired lawyer with the U.S. Securities and Exchange Com- mission. At least 20 other states are known to be affected, and an Associated Press survey in- dicates in addition to losing $418 million a year in future revenue, the tab could rise to $1.3 billion if refunds for prior years are required for their 910,000 retirees. The states listed by National Conference of State Legislatures as affected are: Arizona, Arkan- sas, Georgia, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Montana, New Mexico, New York, North Carolina, North Dakota, Oklahoma. Oregon, South Carolina, Utah, Virginia and West Virginia. \It was a bombshell we knew might happen and now has hap- pened,\ said Oklahoma House Speaker Jim Barker, whose state could lose $22 million a year. Paul Davis, of East Lansing, said he figures to save $800 a year in Michigan income taxes because of his lawsuit. Davis — who declines to give his age, saying only that he's a senior citizen — filed the lawsuit in 1984 because Michigan taxed part of his federal pension, but not the pensions' of state and local government retirees. The court rule^March 28 that the retirees mlist be treated equally — both taxed or both exempt — and sent the case back to the Michigan Court of Appeals. \I didn't anticipate the impact would be so large on states like Virginia,\ said Davis, who rep- resented himsejf in the lawsuit. The ruling means a $5 million to $8 million a year loss to Michigan, where Attorney Gen- eral Frank Kelley has asked the court to spare the 24,000 federal retirees from taxation on the same basis as local and state retirees. At least 2\ states treat federal pensions differently from state and local ones, according to Ronald Snell, senior program director for fiscal affairs of the National Conference of State Legislatures. State laws differ, but in Michigan, the first $7,500 of a single federal retiree's pension was exempt from state tax, but all of the state and local pen- sions were exempt. By NANC Y BENAC Associated Press Writer WASHINGTON (AP) - Wholesale prices rose a moder- ate 0.4 percent in March, the government said Friday in a report that buoyed spirits on Wall Street, where fears of spiraling inflation had risen in tandem with earlier steep price increases. Analysts said that while last month's restrained gain in the Producer Price Index for finish- ed goods should allay fears that inflation will skyrocket, it does indicate that price rises persist. March's 0.4 percent gain, combined with steep gains of 1.0 percent in January and Febru- ary, works out to a compound annual inflation rate of 10.2 per- cent for the first quarter of 1989. That is the largest quarterly increase in eight years and rep- resents a sharp escalation from the 1988 inflation, rate of 4.0 percent. Officials renew criticism of Exxon By PAUL JENKINS Associates Press Writer VALDEZ, Alaska (AP) - State and federal officials unleashed a fresh barrage of crit- icism against Exxon on Friday, blasting it for \entirely ippde- quate\ efforts to clean up spilled crude oil and declaring, \This is a war.\ Dennis Kelso, commissioner of the Department of Environmen- tal Conservation, said his department has been left on standby three weeks after the 10.1 million-gallon spill. Officials are awaiting Exxon's plan to clean 3,000 shore sites. \No plan has been submit- ted,\ Kelso said. \I do not think there is a written plan.\ Gov. Steve Cowper and Coast Guard Commandant Paul Yost returned to survey the hundreds of miles of twisting, oily coastline. Yost set a Saturday deadline for Exxon t o produce a cleanup plan for the spill, which officials said was not breaking up as fast as they had hoped. Authorities said they probably would have to use high-pressure hot water spray to cleanse many beaches, a controversial tech- nique because it kills organisms on and beneath the surface of the beach. WEATHER Occasional rain. High in the mid 50s. South winds 10 to 20 mph. Cloudy tonight with a chance of showers early. Clearing later on. Low in the mid 30s. Chance of rain 50 percent. Sunday: Mostly sunny. INDEX Business News 12,13 Classified 25-32 Comics 24 Date Calendar 8 Editorial 4 Entertainment 23 Horoscope 24 Lottery: 6-4-8. 'Wi«4': 6 8-6-8 K«lfO: 3, A 16, 17, 18, 20, 24, 27, 30, 43, 44, 46, 52, 54, b6, 57, 59, 61, 62, 7 Ann Landers 24 Lifestyles 8 Public Record 6,7 Religious News 9 Speak Out 15 Sports 18-22,25 Weather 10 \This is a war,\ Yost said. \Don't look for a miracle on beach-cleaning,\ he said. \We need hundreds of people, maybe multi-hundreds, maybe multi- thousands.\ Cowper, who arrived Friday wearing faded jeans and rubber boots, said he was pleased Yost had taken over command of the cleanup. \We were not satisfied with the way the operation was being coordinated,\ he said. \I think it's obvious that we, the state and the Coast Guard, are not satisfied with the way Exxon has performed.\ Exxon had good intentions, he said, but \good intentions and good performance are two sepa- rate items.\ Cowper led denunciations of Exxon by state officials last week, threatening even to shut down the trans-Alaska oil pipeline. But officials had been more muted this week until Kelso's latest comments. \We've been frustrated by the in-the-water cleanup. We don't want to see that replicated on the shoreline,\ Kelso said, call- ing Exxon's efforts \entirely in- adequate.\ Added Yost: \I'm not satisfied with the beach cleanup program. I want a lot of people on the beach cleaning up.' 1 Exxon officials did not res- pond immediately to a request for comment. Produci Price Index For flntetwd good* Seasonally «$ uatad change from prior Stocks jump Page 12 Nevertheless, the stock mar- ket, cheered by the apparent eas- ing in inflationary pressures, was up sharply, gaining 41.06 points to close at 2337.06. The market appeared to shrug off Friday's merchandise trade report, which showed the deficit widening 20.9 percent in Febru- ary to $10.5 billion. Economist Cynthia Latta of Data Resources Inc. in Lex- ington, Mass., noted that, while the trade gap widened, the change was in line with what analysts had expected and amounted to \moderately good news.\ \The deficit is not shrinking, but we didn't expect it to any- way,\ she said. \We don't see it improving this year by any significant amount.\ Analyst Latta said the com- bined effect of Friday's reports was to suggest \the economy is definitely slowing and inflation is a problem but it's not neces- sarily a worsening problem.\ For a year, the Federal Reserve Board has been pushing up interest rates in an effort to cool the economy and thus dampen inflationary pressures. Analysts are divided over whether the central bank will be able to slow the economy just enough to check inflation without unintentionally pushing the country into a recession. Two other economic reports Friday provided signs of a possible easing of inflationary pressures and a slowing of the economy as it enters the seventh year of its record peacetime ex- pansion. Those reports showed: • The operating rate for U.S. factories declined for the second consecutive month in March, while the pace of industrial pro- duction was flat for a second Continued Page 16 Bush, Congressional leadership hail deficit-cutting compromise By TO M RAU M Associated Press Writer WASHINGTON (AP) - President Bush and congres- sional leaders Friday announced a showpiece budget compromise to reduce the 1990 federal deficit to under $100 billion without raising taxes. But the pact puts off most hard decisions and Democratic- leaders suggested it could open the way to tax increases next year. Bush, flanked by top lawmakers at a White House ceremony, boasted they had ac- complished \the first such agreement reached ahead of schedule and not framed in the context of a crisis.\ He called it a \first manageable step\ in the deficit-fighting journey. The plan would enable Bush to say he is holding to his \no new taxes\ campaign pledge, while trimming the budget deficit to $99.4 billion, just within the $100 billion target set by the Gramm-Rudman budget-balanc- ing law. Under the agreement. Bush would be forced \o accept lower defense spending and more spending for domestic programs than he initially sought. In ex- change, congressional leaders pledged to abide by Bush's an- ti-tax stance — at least for one year. But even as the accord — hammered out the night before between administration and Reds shuffle Georgian leaders By JOHN-THOR DAHLBURG Associated Press Writer MOSCOW (AP) - Soviet Georgia's Communist Party chief and premier were removed Friday, five days after they ordered troops to disperse a crowd of protesters in a bloody melee that killed 19 people. The KGB chief was named party leader. \Nobody and nothing can justify the deaths of absolutely innocent people,'' Foreign Minister Eduard A. Shevard- nadze, himself an ethnic Georgian, said in a speech to the local party plenum that made the leadership changes. He said in remarks later broadcast on Soviet television that it was impossible to tolerate blunders by officials that led to \death and loss.\ Shevardnadze, party chief in the southern republic from 1972 to 1985 and a member of the rul- ing Politburo in Moscow, was dispatched to his homeland after Sunday's bloodshed. The resignation of Communist Party First Secretary Dzhumber I. Patiashvili, who had accepted responsibility for the tragedy, was unanimously accepted by the party's Central Committee after \heated discussion,\ Foreign Ministry spokesman Gennady I. Gerasimov told a news briefing in Moscow. Givi (j. Gumbaridze, who has been Georgia's KGB chief for two months, was elected to replace Patiashvili. Gumbaridze, 45, previously served as party leader in Tbilisi, Georgia's capi- tal city of 1.2 million people. Premier Zurab Chkheidze also was removed at a separate meeting of Georgia's Presidium, or top government body, the of- ficial Tass news agency reported. congressional negotiators — was announced with great fanfare, key participants conceded that it was only a skeleton that fell short of spelling out where specific programs should, be cut to accomplish the savings it trumpeted. \No one should be deluded into thinking that this is the end c of a process,\ said Senate Major- \ ity Leader George Mitchell, D- Maine. \It is the beginning of a process. Very hard choices lie ahead.\ And another leading Demo- crat, Senate Finance Committee Chairman Lloyd Bentsen, D- Texas, boycotted the Rose Garden session entirely, al- though he joined other congres- sional leaders in attending a preceding White House session with Bush to go over the com- promise. \He declined to go out into the Rose Garden and have his picture taken because he doesn't like the agreement,\ said Bent- sen spokesman Jack Devore. Still, Bush, his top lieutenants and most congressional leaders were upbeat. \It is a major step toward a balanced budget,\ said House, Republican Whip Newt Gingrich, R-Ga. Major elements of the agree- ment include: • Total deficit reductions of about $28 billion for the fiscal year that begins next Oct. 1. The projected 1990 deficit of $99.4 billion compares t o a 1989 deficit estimated by the ad- ministration at $163.3 billion Saratoga's back! Saratoga Harness entries and Press-Republican after a four*yf will appear each day during the ]._.. our expanded scoreboard section^'* ; *•:• iirVn- 'ft****'*' »'-j\-f_ afa '^fJi 1 ii nif \ «•* •'••' > ijgM

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