Private Settlement

Arkansas Governor Winthrop Rockefeller has dipped into his own capacious pocket to supplement the pay of a dozen state officials, although the Arkansas attorney general told him it was unconstitutional. Newark's Mayor Kenneth Gibson has persuaded local businessmen to add $2,500 a year to the city business administrator's $35,000 salary in order to attract a top outside professional to the job. Now the mayor of Honolulu, Frank Fasi, has offered $40,000 from his campaign war chest to help fend off a strike of Teamster drivers that would have halted two privately owned Oahu bus lines. The union accepted Fasi's "very attractive proposal." The money will be used to augment bus-driver salaries for 30 days, by which time the city hopes to have taken over the lines.

Fasi's gambit has some intriguing consequences. If his contribution were considered "personal use" of campaign funds, it would be subject to federal income tax. As it is, the Internal Revenue Service in Honolulu considers Fasi's $40,000 to come under a regulation that makes campaign contributions nontaxable. The bus drivers may not have to pay income tax on their shares of the money, either, since legally it is a gift. Federal planners have worked out any number of ways to subsidize mass transit, but chances are that Fasi's dodge never occurred to them.

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