March 27, 1971

New Rochelle school system, prohibited by State Const from raising any more taxes, will eliminate 136 of 750 professional positions, freeze salaries and make cuts in nonacad areas to offset projected $1.6-million budget deficit for school yr; cuts detailed; crisis linked to salary increases for teachers and other school employes and rising maintenance costs; Schools Supt Spillane blames tax structure for crisis; other cities faced with deficits as result of tax ceiling listed

Washington officials rept no meaningful progress has been made in current Vienna talks; say that USSR delegation has indicated willingness in principle to discuss an accord on defensive and offensive nuclear weapons but still insists accord be reached 1st on defensive systems

State Educ Dept rept of crisis, prepared by Deputy Comr Seldon under order from Nyquist, says bd did not violate state law against overspending in connection with deficit; rept criticizes bd, school system's admrs and city govt for lack of fiscal controls and procedures; urges enactment of legis to assure greater financial accountability of central and local school bds; urges law requiring annual post-audit of all school financial records under guidelines set by State Controller and submission of financial repts and budget details to State Educ Dept; Bergtraum hails rept but opposes proposal that dept send technical assistance teams to city to help central bd and community bds develop fiscal skills and procedures; objects to provision that funds to cover cost of assistance be taken from state funds allocated to city, claiming this would mean reduction of already inadequate state aid; says some reforms suggested by rept are already under way; rept is similar to Sen com rept

Nixon expected to issue Exec order next wk establishing machinery designed to control wage-price rise in construction indus; reptdly will lift suspension of Davis-Bacon Act provision requiring that prevailing wages be paid in Fed and federally assisted construction

Repub legis leaders postpone discussion of possible budget cuts when suburban Repub legislators threaten to oppose budget unless $60-million in state school aid is restored; legislators agree to restore cuts