Bullpen blowup PAGE D1 the THURSDAY APRIL 19, 2001 SALINA, KANSAS Salina Journal Serving Kansas since 1871 50 cents • SALINA AIRPORT AUTHORITY Bloody facts PAGE B1 Salina's air travelers to fare well Great Lakes Aviation's new United deal leads to drastically lower airfares By NATE JENKINS The Sallm Journal A remedy for dwindling use of Denver-bound flights at the Salina Municipal Airport — lower fares — is in the hands of the Salina Airport Authority, which plans an onslaught of advertising to promote the fares. During the past couple of months, Tim Rogers, executive director of the airport authority, forecast a probable drop in Salina-to-Denver fares because of an air carrier's retreat from an exclusive agreement with airline giant United Airlines. His prediction came to be — fares have tumbled. In February, a round-trip, Salina-to- Denver ticket bought three weeks in advance of the flight cost about $460. "The Salina-to-Denver fares had run up there to a point that people didn't want to use the flights," Rogers told the authority board Wednesday during its monthly meeting. Now, the fare for the same ticket made three weeks in advance hovers near $200. The decrease holds true for tickets ROGERS bought not as far in advance and one-way flights. In February for example, a one-way ticket to Denver bought two weeks in advance cost approximately $460; now the fare is around $121. The decrease follows a new, less binding agreement reached between a small-market air carrier and United Airlines. "When we saw these fares in the computer a couple days ago, we thought it was a mistake. I'm thrilled." Lucl Larson owner of Action Travel Under the new agreement, Wyoming-based Great Lakes Aviation still provides daily connections for Salina-area passengers with United Airlines flights in the Denver hub. But Great Lakes now is free to negotiate agreements with other airlines and has significantly more control over its fare structure. , That fresh independence has resulted in a steep drop in Salina-to-Denver fares since the end of March. Beginning in May Great Lakes will officially become an independent car rier with a new moniker — Great Lakes Airline — effectively ending the United Express name. For months, high fares have dampened the appeal of flying from Salina to Denver, the most popular destination for area residents, Rogers said. From January through March 2000, for example, 1,374 passengers boarded Denver-bound flights in Salina, compared to 866 during the same period this year. The authority has scheduled a flurry of advertising in a variety of me dia beginning this week and next. Ads will include comparisons with fares from Wichita to Denver, which have been significantly higher since the drop in the Salina-based fares. They also will note free parking at the Salina airport, which isn't available at Wichita and Kansas City airports. Luci Larson, owner of Action Travel, 116 S. Seventh, spoke Wednesday to the board about the new fares. "When we saw these fares in the computer a couple days ago, we thought it was a mistake," Larson said. "I'm thriUed." After the meeting, Rogers said the new fares are not part of a special promotion, and Great Lakes has not restricted them to a certain window of time. • See other airport authority news / Page A6 • The Associated Press Robert Gait, a trader In the S&P futures pit at the Chicago Mercantile Exchange, shouts an order after the Federal Reserve made a surprise announcement that it was cutting a key interest rate one-half percent Wednesday. Surprise party Unexpected interest rate cut sparks huge stock surge By AMY BALDWIN The Associated Press NEW YORK — An unexpected interest rate cut and a stream of positive earnings news sent stock prices soaring Wednesday, with the Dow Jones industrials leaping as much as 470 points and the Nasdaq composite barreling back above 2,000. Better-than-expected first- quarter profits had already sent stocks sharply higher in mid-morning trading when the Federal Reserve announced it was lowering interest rates by 0.5 percent- ^ Analysis of what the rate reduction means / Page A5 age points. The cut, the fourth this year, gave investors hope the economy and earnings will rebound by the end of the year. The Dow Jones industrials soared 399.10, or 3.9 percent, to 10,615.83, the average's third-largest daily point gain. The blue chips were up as much as 470 points before settiing back before the close. A surprise rate cut from the Fed Taking investors by surprise Wednesday, the Federal Resan/e cut a key interest rate by one-haif percent. Stocks Immediately soared. Prime rate 7.5%*-, 10%T" 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000'01 • Commercial banks are cutting thak prime rate effective Thursday. Note: In months In which a rate was changed several times, the last chenge of the month Is shovm. See FED, Page A2 SOURCE: Federal nesen/e AP Rate cut expected to have significant impact in Salina By TIM UNRUH The Salina Journal A surprise slice in interest rates by the Federal Reserve goosed the stock market Wednesday and raised local spirits along with the hope that a slowing local economy also will be goosed. The Federal Reserve dropped by half a percentage point its federal funds rate, and that reduction will ripple to interest rates of all sorts — including banks' prime rate charged to top business borrowers, mort gage rates charged to home buyers and rates paid to savers on bank savings accounts. The Fed's cut is the latest in a series this year that have brought interest rates down by two percentage points. The effect of the cut was immediate on Wall Street. The stock market, which already was trading higher, surged when the Fed's announcement was made at mid-morning. See LOCAL, Page A2 T STATE GOVERNMENT Read my lips: There will have to be new taxes With rare tough talk, Graves says state taxes must be raised By JOHN HANNA The Associated Press GRAVES TOPEKA — Gov. Bill Graves denounced two legislative budget proposals Wednesday and declared that raising taxes is the best way to solve the state's financial problems. "I clearly understand what they're trying to do," Graves said at a news conference. "I just think the net result is going to be a disaster." Legislators must close a $206 million gap between expected revenues and spending they have already approved for fiscal 2002, which begins July 1. The House and Senate are on break until next week, but both chambers' budget committees worked again Wednesday on possible solutions. Earlier Wednesday, House leaders outlined a budget plan that would cut spending about $60 million and would not raise taxes. A plan by Senate Ways and Means Chairman Steve Morris would increase taxes — but only by $10 million and only on out-of-state insurance companies — while cutting appropriations by about $30 million. Both would tap money not normally used for general government expenses, such as extra federal nursing home payments the state expects to receive into 2002. Graves criticized both proposals as too reliant on revenue that won't be collected again in fiscal 2003. He said legislators would create another big budget gap to close next year. He reiterated his willingness to consider a wide range of proposals for tax increases, including a proposal from Democratic leaders to raise estate taxes. He also listed sales, tobacco and liquor tax increases as possibilities. "I'm warning folks that I believe our failure to do this the right way will lead us to some dire consequences down the road," Graves said. Graves' strong language stood out from his typically cautious rhetoric. The last time WEATHER High: 77 Low: 62 Mostly cloudy and windy. Tonight, mosdy cloudy and breezy. PAGlE A3 The surging Mississippi River has forced hundreds of shoreline residents to abandon homes, and more rain is in the forecast. TOMORROW A PBS documentary about the tallgrass prairie that will air Friday is narrated by musician Lyle Lovett and includes Salinan Wes Jackson. INSIDE Classified / C2 Comics / B4 Crossword / 84 Deaths / B3 Great Plains / 81 Home /CI Money / A5 Sports / D1 Weather /C8 Viewpoints / A7 "If there was money to be cut, they had 85 days to identify it, and they didn't. My belief is at this point, anything they're identifying now, they're just making it up." Gov. Bill Graves on legislators' talk of approving a budget without raising taxes he was as tough with legislators in public was in 1996, when he derided an education funding plan by telling them, "Which part of 'hell no' don't you understand?" On Wednesday he criticized the proposed spending cuts in the House plan, saying legislators have "kept the thumb on these folks" in government so that there's little or no fat to cut. And he noted the proposed cuts didn't emerge until after the 85th calendar day of the 2001 session. The House plan would trim out-of-state travel by government employees, close two minimum-security prison work centers, hold pay raises for university faculty to 3 percent and delay payments to doctors and hospitals for services to the poor and elderly "If there was money to be cut, they had 85 days to identify it, and they didn't," Graves said. "My belief is at this point, anything they're identifying now, they're just making it up." Before recessing April 6, legislators approved a $9.11 bUlion budget that included $4.66 billion from the general fund, which holds most of the state's tax revenue spending. The increase in general fund spending would be about $230 million, or 5.2 percent. However, revenue projections will permit legislators to increase general fund spending only about $24 million, or 0.5 percent — unless they find additional sources of revenue. House leaders would preserve a 3 percent pay increase for most government workers, keep up with the increasing number of people using social services and save a proposal Graves made in January to increase aid to public schools by $50 per pupil.
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