NEWS CONFERENCE 853

Q. Is this money that's still to be paid to the local governments?

A. Most of it's been paid in to the State. I don't know the mechanics
of its distribution. You'll have to check with the Comptroller to see
whether it has been distributed yet. But $93 million is the estimated
local share as I recall — maybe a little more than $93 million in the
May 27th report. I want to emphasize that my conversations with Mr.
Goldstein were not for the purpose of making him uncomfortable,
but for the purpose of trying to ascertain exactly why we have the
shortage. I made the suggestion, and we still haven't come to any
conclusion, but we did agree yesterday that the five-man committee
that I appointed will continue to look into the situation, and when
they have reached some conclusion we'll have another meeting with
all of the fiscal people concerned; so that the reports in the morning
press to the effect — one of the morning papers — to the effect that
nothing was decided about how to proceed of course are totally in-
accurate and the transcript of the conversation would show that.

(Taxes)

Q. Governor, even before this $36 million deficit showed up, your
budget for this year was austere — you held it down. Does this in-
dicate to you that based on the new income tax you will have another
tax hike next year?

A. I don't think that we can come to that conclusion yet by any
stretch of the imagination, because we really don't have any figures
at this moment that we can rely on. Certainly if we can't decide
why there's a shortage and we can't decide the degree of the shortage,
we don't know whether we're going to have to move to raise additional
revenue. And as I said before when this shortage first came to light,
I am much more interested in cutting back on expenses than I am
in raising taxes. We are facing a tax increase at the Federal level
that's going to be very tough to handle for the average family, and I
feel that I am called upon to exercise the utmost in economy to not
make it necessary to have another State tax increase this year.

(Effect of Federal Tax Increase)

Q. Won't the Federal tax, as has been pointed out many times, cut
down on the sales tax revenues?

A. Yes, I'm afraid it will. I think it will inhibit the sales tax and
maybe to some extent the corporate tax, but instead of simply looking
for new revenue I think we've got to look for ways to cut back in
spending. And I would hope that the subdivisions will also do that.