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<br />Reagan to Address IRS Bond Changes'
<br />
<br />By Frank Partsch
<br />WOR~RALDBUREAU
<br />.. Milwaukee - Gov, Thone and other
<br />Midwestern governors did .not re-
<br />ceive the specilics they might have
<br />wanted lrom a White House aide
<br />Monday ,on how the new lederal
<br />budget will alfect state revenues,
<br />But they did'obtain a pledge that
<br />President Reagan's attention will be
<br />, directed at another state problem,
<br />That problem grew out 01 an Inter-
<br />nal Revenue Service ruling last week
<br />that governors said will jeopardize
<br />the sale,ol taX-exem'pt bonds to aid
<br />farmers" and businessmen. Several'
<br />states,- including Nebraska - have
<br />enacted such schemes,
<br />Presidential assistant Richard
<br />Williamson said Reagan had not been,
<br />aware of the IRS matter, which elimi-
<br />nates"' tax exemptions on certain
<br />bonds, and, Cllnsequently" jeopar-
<br />,dizes their ability to produce low-in-
<br />terestloans. ,
<br />Thone and Missouri Gov, , Christer
<br />pher Bond were dralting a T\'solution
<br />for submission to the Midwest Gover-
<br />nors: Conlerence belore it adjourns
<br />Thesday, , " '.. ' ',..,
<br />, Williamson said details about what'
<br />inost governors expect will be a re-
<br />duced flow of federal dollars to state
<br />treasuries will not be available untii'
<br />later.
<br />The ,administration was disap'
<br />pointed in' recent surges in the Con-
<br />sumer 'Price Index and in the
<br />continuing high interest rates, Wil-
<br />liamson said. "
<br />Beloreanything can be determined'
<br />on domestic spending, "The presi-
<br />dent will have to make a decision on
<br />whether he slows the growth rate on
<br />militaryspendiAg," he said,
<br />"The budget fight isn't over yet,"
<br />headded,and will remain the admin-
<br />isttation's top priority through this
<br />,year,
<br />
<br />, Other issues on which the Reagan
<br />,stafl will Cllncentrate'this fall, he
<br />said, are the fight against crime. pro-.
<br />motion of volunceerism. establish-
<br />ment of economic enterprise zones in
<br />depressed urban areas and speeding
<br />the flow of responsibility lrom' the
<br />lederal level to the state and local
<br />levels,
<br />Contrary to the reception given the,
<br />presidential emissary at last 'year's
<br />Midwest conference. Williamson's
<br />.appearance was harmonious.
<br />Only Minnesota Gov, Albert Quie
<br />.offered advice to the White House:
<br />Quie said he hopes Reagan doesn't
<br />cut too deeply into domestic prer
<br />grams in order to retain the big in-
<br />creases charred in military
<br />spending. '
<br />The White House choice, of Wil-
<br />liamson to attend the conference 114
<br />lustrated changing times and issues.
<br />Last year, President Carter's agri-
<br />cultural secretary, Bob Bergland;
<br />was roundly criticized by the gover-
<br />nors for the administration's partial-
<br />grain embargo to the Soviet Union..
<br />
<br />W.illiamson is Reagan's ass'istant
<br />'on intergovernmental' relations - "a
<br />matter that is high on the minds 01 all
<br />" governors in view of the new budget:
<br />. Williamson said the president's
<br />economic program and desires to
<br />shilt responsibilities to the states will
<br />, playa role in the states' efforts to sta-
<br />bilize their job and population bases
<br />in the" face of industrial moves to
<br />what are called the Sun Belt states of
<br />the South, Southwest and West.
<br />
<br />Reagan plans to establish a North
<br />east-Midwest commission on ec
<br />nomic initiative to address thos
<br />matters, Williamson said.
<br />Thone a"nd others 'said water will
<br />" playa major role in revitalization of
<br />the midwest economy.
<br />Industries need water for proc-
<br />essing and transportation" Bond
<br />
<br />I
<br />.
<br />
<br />said: 1 Mt might uttimately halt the
<br />growth of industry'in the Southwest
<br />and restore it to the water-rich Mid-
<br />west, he said, calling on governors {Q
<br />analyze their industrial postures and
<br />deterniine the role of water and taxa-
<br />tion patterns in attracting and hold-
<br />, ing industry,
<br />
<br />"The Srlow Belt versus the Sun Belt
<br />may become the Water Belt versus
<br />the Sand Belt," said Wisconsin Gov,
<br />Lee Dreyfus, who suggested'a water
<br />severance" tax to discourage dry
<br />states from" proposing interstate
<br />water transfers.
<br />
<br />Midwest Water Seen
<br />As Saleable Resource
<br />Milwaukee lAP) - the 11 states
<br />represented at a Midwestern gover.
<br />nors' conference were greeted here
<br />by WISCllnsin Gov, Lee SO' Dreylus
<br />with' a suggestion that they might
<br />prolit someday by selling their water
<br />as other states sell theiroil and coal.
<br />The Southwestern and Western
<br />states whose water resources are
<br />limited and which are wooing indus-
<br />, try away from the East and the North
<br />"are going to find themselves abso-
<br />lutely overextended," Dreyfus said,
<br />The Midwest, he said, Clluld become
<br />the water OPEC of the United States,
<br />The wate~ supply was mentioned
<br />Sunday as he and other governors as-
<br />sembled for the tWlHlay 20th annual
<br />Midwestern Governors Conference to
<br />discuss their states' economics.. ,
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