The MA ichigan Daily-
Vol. XCII, No. 6S Ann Arbor, Michigan-Wednesday, May 12, 1982 Ten Cents Sixteen Pages
State tax hike passed
Hugre budget cuts averted
From staff and wire reports
With the hours ticking away
h m . and the state's credit rating
"rY possibly on the line, the
Legislature dramatically
reversed itself yesterday and
approved Gov. William
Milliken's temporary income
tax increase.
Final approval of the
measure, 56-50 in the House,
came about 29 hours after the
Legislature began an
emergency session Monday at
Milliken's request.
Adoption of the tax hike
saved the University from a
$21 million cut in state aid,
which was part of a budget
cutting executive order
Milliken would have im-
plemented if the legislature
had failed to approve the tax
hike.
THE SESSION was prompted
GOVERNOR MILLIKEN called approval of the tax hike the by a Friday decision by
turning point in the state's economy. Moody's Iivestors Service of
Haig asks nation to
Reagan's plan to cut
WASHINGTON (AP) - Declaring military modernization program He said th
that chances of ratifying the SALT II would be the United States' most im- "a new natio
treaty are "dead," Secretary of State portant bargaining tool in negotiations the preside
Alexander -Haig called yesterday for with the Soviets. Congress can "make realistic and
national support of President Reagan's or break" the new Strategic Arms arms agreei
new plan for deep cuts in Soviet and Reduction Talks, likely to get underway The c
U.S. nuclear arsenals. in Geneva in late June or early July, omm
During testimony before the Senate with its action on that program, he ad- proposals d
Foreign Relations Committee, Haig ded. race and wil
contended that proposals for a mutual While the administration welcomes Mark Hatfi
nuclear freeze by the superpowers the growing national attention on Kennedy (
would undermine Reagan's proposal by nuclear policy, Haig said, "We hope ... sponsors of
eliminating Soviet incentives for that this debate will not culminate in across-the-
meaningful reductions. fresh battle lines between divided fac- "through
HE SAID A strong commitment to a tions." equally effec
New York to drop Michigan's
bond and note ratings to the
lowest level in thenation.
"I really believe this is a
turning point in Michigan's
history," a delighted Milliken
said shortly after the final
House vote, noting it was "the
toughest fight" in his career.
The bill boosts Michigan's
4.6 percent income tax to 5.6
percent from April 1 through
September 30. It is expected to
raise about $300 million.
STATE Budget Director
Gerald Miller was en route to
Lansing when the Senate
finally cast an approving 22-15
vote on the bill.
He was returning from a
last ditch attempt in New
York to persuade Moody's to
leave Michigan with a
passable credit rating, an ef-
fort he said needed passage of
the tax to succeed.
The budget. chief said he
back
arms
e administration is seeking
.nal consensus in support of
nt's preoposal for a fair,
d truly beneficial strategic
ment."
iittee is considering various
esigned to curb the arms
1 hear testimony from Sens.
eld, (R-Ore.) and Edward
D-Mass.), the principal
F a measure calling for
board. arms reductions
annual percentages or
ctive means."
"made the strongest pitch I
could make" in favor of the
state's bond rating. A decision
from Moody's is expected
early today.
MILLER said Moody's of-
ficials were "pleased" when
they learned the Legislature
had passed the tax. He would
not predict how it could effect
the state's bond ratings.
Moody's has insisted
throughout thgt it was
"reviewing" the credit and
had made no decision on
Michigan's rating. Some
analysts said they believed
that Michigan officials may be
using the issue in order to get
a budget-balance tax proposal
through the legislature.
THE SENATE vote which
passed the tax was the fifth
vote in a month on the issue-
the third in 24 hours. The tide
turned when three Democrats-
See OND. Page 7
Haig
.. calls SALT II 'dead'
Visiting 'U'
scholars
suspected of
smuggling
info rmation
By SCOTT STUCKAL
The luggage of three Chinese scholars returning
home from a stay at the University was seized last
week by customs officials, who suspectedI the trio was
attempting to take sensitive technical information
out of the country.
The scholars, who came from the communist
People's Republic of China to study at the Univer-
sity's aerospace engineering department, had their
luggage detained at New York's Kennedy Airport,
according to reports from a local television station
and an unidentified customs inspector..
KENNEDY AIRPORT officials, however, refused
to confirm or deny the report.
The three scholars, Chuanjun Yan, Shi-jie Yu, and
Bo-hu Li, were "allowed to look at everything"
during their University stay, said Prof. Robert Howe,
chairman of the aerospace department. Howe said all
of the University's aerospace information is non-
classified and available to the public.
Howe said Li worked on computer graphics of flight
simulation and design systems, while Yu and Yan
studied gas dynamics and had access to computer
materials.
Exporting such materials-classified or non-
classified-to communist countries requires a licen-
se, said Douglas Ballard of the Commerce Depar-
tment's export division. Ballard added that customs-
officials "have a right to seize material they consider
sensitive."
Professors in the aerospace engineering depar-
tment said they did not know why the material would
be considered sensitive. "There are so many ways to
obtain technical material," said Prof. Thomas
Adamson.
Howe said the Chinese scholars came to the
University through a cultural exchange program.
They were technical experts sent to the University to
re-learn their specialties.
The department does not discriminate against
visiting scholars from communist countries, Howe
said.