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June 15, 1978 - Image 8

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Michigan Daily, 1978-06-15

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Page 8-Thursday, June 15, 1978-The Michigan Daily
Taxes already lowered in La.

NEW ORLEANS (AP)-California voters made the
tax revolt a hot political issue in 1978, but that is a bat-
tle long won in Louisiana where the property tax has
been hammered down to zero for many homeowners.
Now, a campaign is under way to eliminate the tax
for even more Louisianans.
"WE GOT THEIR hands tied now, they can't bleed
us," said Lawrence Chehardy, 56, a former county tax
assessor who started his fight for lower taxes 12 years
ago and won it eight years later, in 1974.
That year, a state constitution was approved with
homestead provisions eliminating all property taxes
for owner-occupied homes worth less than $50,000.
It is not known how many of the 802,037 homes under
homestead exemption are valued at less than $50,000. A
survey by the Tax Foundation Inc., a research group,
showed, however, that in fiscal 1976, the state collected
$90 per capita in property taxes from every source,
compared with a national average of $266.
LOUISIANA IS ABLE to keep property taxes low
partly because of huge income from an oil and gas
severance tax. Every barrel of oil and every lcubic foot
of natural gas from Louisiana puts cash in the state
treasury-$493 million in fiscal 1976, equal to almost
one-fourth of all state income.
Louisiana also spends less than some states which
tax more. For example, it spends $1,074 per pupil per
year on education from kindergarten through college.

Only Arkansas and Mississippi spend less.
Income from the oil and gas severance tax is
declining at about 4 percent a year as production
drops,-and legislators are uneasily scouting for poten-
tial new sources of revenue. Chehardy, meanwhile, is
campaigning to exempt even more homeowners from
the property tax.
UNDER THE CONSTITUTION, homeowners who
live in their houses get a homestead exemption on the
first $5,000 of assessed valuation. Since state law limits
assessed value of land and homes to no more than 10
percent of fair market value, there iso property tax
on homes worth up to $50,000, because they are
assessed at $5,000 or less.
Chehardy wants to double the exemption, abolishing
property taxes on owner-occupied homes worth less
than $100,000.
Chehardy predicts that Louisiana's system will
spread to every state. "There is no question in my
mind about that," he said. "Once a man can't afford to
own his own home because of taxes, then there goes
America."
TAX REVOLT WAS spotlighted when California
voters approved Proposition 13, cutting property taxes
to 1 percent of market value and limiting other taxes.
Chehardy said Louisiana's system is even better for
the homeowner
"For example, the owner of a $60,000 home in

California will now pay approximately $600 a year in
property taxes, compared to a tax bill of $85 in New
Orleans," he said.
Chehardy was tax assessor of Jefferson Parish coun-
ty, a heavily populated area adjacent to New Orleans,
when he began his rebellion,
"At the start I couldn't get one vote in the
legislature," he said. "I fought the establishment and
the big city newspapers. I can laugh now. I earned my
spurs without them."
By the time the constitution was approved, it had so
many Chehardy touches that Gov. Edwin Edwards,
generally credited with pushing it through, calls it the
Chehardy Constitution.
Critics contend the tax changes were no favor to
Louisiana.
"ALL HE HAS done is help the middle and upper in-
come people. He has hurt the blacks, the poor and the
renters," said-Ed steimel of Baton Rouge, president of
the Louisiana Association of Business and Industry.
Steimel argues that property taxes may go down, but
the citizen still pays because when the burden shifts to
business and industry it is passed on to the consumer.
Chehardy once said he was destined to be governor,
but he has given up the idea.
"Being governor wasn't for me," he said. "I like my
issue instead. I will be in the fight for property tax
rights until the day I die."

GOP tax
cut plan
gains Dem

Brown slashes budget,
freezes state salaries

2 3
WASHINGTON (AP)-A Republican
plan to cut individual federal income
taxes an average of 33 percent picked
up its first Democratic support in the
Senate yesterday as sponsores declared
the nation already is in the grip of aa
taxpayers' revolt.a
Sen. Sam Nunn (D-Ga.) endorsed the
GOP plan. He told a new conference,
"Clearly, the message with respect to
levying taxes is like shearing sheap,
you stop when you reach the skin."
AN AIDE to Sen. William Roth (R-
Del.), chief backer of the tax cut, said
Nunn's endorsement will prompt
several other unidentified Democratic rtOn
senators who support the measure to
declare their backing openly. In the
House, the plan already counts 13 Feds W on
Democrats among its 148 sponsors. Th1Rteplnd sud Wa alfle
The Roth plan would mean a larger contined from Page 1)
tax cut than proposed by President Car- HE SAID that since taxes were much
ter. And the reduction would become ef- higher in California than in most states,
fective Oct. 1-a month before the the pressures for lowering property
congressional elections and three mon- taxes there were greater than they-
ths earlier than the president's would be elsewhere. For example, Car-
proposal. ter said that even with the enactment of
ROTH, WHO shares credit for the tax Proposition 13, property taxes are still
cut plan with Rep. Jack Kemp (R- higher in California than they are in
N.Z.), said that because of its Georgiaand Alabama.
Democrats' record on taxes, his bill is But Carter also said the 2-1 margin by
"the only game in town" which the measure was approved by
"We are no longer on the verge of a the voters is a demonstration that tax:-
tax~payers' revolt, we are in the midst of payers want more efficient government
one," Roth told reporters, "with nd are concerned about higher taxes.
California an entire state has gone on He said the action is "not incom-
record as recognizing taxpayers are an patible" with his own goal of holding
endangered species." down government spending and cutting
Senate Republican Leader Howard federal taxes.
Baker repeated the argument he has Carter said unemployment probably
been making for several months: will increase in California because of
President Carter's tax-cut plan is top job lay-offs by local governments, and
small even to offset Social Security he said some. of the 15,000 federally
taxes tha go into effect next year and supported jobs in a job training.
the increase in income taxes caused by ' program.CETA, might be threatened.

SACRAMENTO, Calif. (AP) -
California Gov. Edmund Brown an-
nounced a $570 million cut in his
proposed $17.4 billion 1978-79 state
budget yesterday, including a one-
year freeze on salaries for all state
employees.
The Democratic governor said the
cuts will free state money to ease
impact on California's local gover-
nment of a $7 billion property tax cut
forced by passage last week of
Proposition 13, the Jarvis tax revolt
initiative.
THE MEASURE, approved nearly
2-1 by voters statewide, limits
property tax to one per cent of-
market value and takes effect July
1.
The $570 million that would be
saved by the proposed cuts would
become part of the $4 billion in gran-
ts and $1 billion in loans which
Brown proposed giving to cities,
counties and schools. The state

already has a $3.45 billion surplus,
which Brown has pledged to local
government.
Brown said the wage freeze will
save $166.5 million. He also announ-
ced a $117 million cut'in state Medi-
Cal and health programs, and a five
per cent across-the-board cut in
state operating expenses, intended
to save another $42.4 million.
"STATE WORKERS are suffering
from inflation just like everyone
else, and in one sense it seems unfair
for them to be asked to make a
special sacrifice while many
workers in the private sector are
receiving pay raises," the
Democratic governor said.
Brown described the pared-down
state budget as "austere." But he
said essential services will be main-
tained while the state used available
funds to assist schools, law enfor-
cement and other local government
services.

't bail out Calif. towns

There undoubtedly will be an increase
in federal unemployment benefits to the
state as a result, the President said.
"THERE WAS a message for
Washington as well as California in the
Proposition 13 voting," McIntyre said,
adding:
"So I assert it is wishful thinking that
the federal government can, or will,
step in all along the line to help ease the
financial burdens resulting from state
or local citizen voting. Federal resour-
ces are not infinite; indeed, they are
being stretched tight as things stand
today."
The administration expects a deficit
of about $5 billion in fiscal 1979, begin-
ning Oct. 1, but McIntyre said the 1980
budget "will be very, very tight."
THE BUDGET chief disclosed that
the administration is considering cut.
backs in aid to California because of the
Proposition 13 vote. McIntyre noted

that existing laws prohibit spending
federal money on education programs
previously carried out by a state or
local government.
If California stopped spending money
on teaching programs for the han-
dicapped or vocational education, for
example, the federal government
would withdraw its share for the
programs, he said.
The administration also is con-
sidering similar restrictions for child
nutrition programs and government
jobs for the unemployed, McIntyre
said.
CALIFORNIA officials have not in-
dicated they will seek financial aid
from Washington, however.
McIntyre said President Carter's
policies have been "directly related to
taxpayer frustration expressed during
the 1976 campaign and in the California
vote."

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