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.