
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, July 12, 1993                   TAG: 9309030369
SECTION: EDITORIAL                    PAGE: A4   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

PUBLIC EMPLOYEES

IN 1989, THE U.S. Supreme Court ruled that Virginia and other states couldn't tax federal retirees' pensions unless they also taxed the pensions of state-government retirees.

That decision itself was strange - why should it matter whether a state provides its own retirees lower but untaxed benefits, or higher but taxed ones? - and ensuing developments have been equally strange.

But last week saw a hint that the strangeness may be leveling off.

To be sure, the strangeness quotient rose on Wednesday, when 24 former state employees sued the state for either (after all, money's money) bigger pension checks or a refund of some of the state taxes they've had to pay since 1989. Among the plaintiffs are such underprivileged souls as two retired judges and the retired head of the pharmacy department at the Medical College of Virginia.

Adding potential injury to insult is the fact that the state employees' suit comes as Virginia is trying to block an effort by federal employees to gain refunds of state taxes they had to pay before 1989. The injury to the state, if both groups were to win, could conceivably approach $1 billion.

On Thursday, however, the strangeness level fell: Gov. Douglas Wilder dropped his proposal to hold a statewide referendum on whether Virginia should continue to fight the federal retirees' claim.

Wilder cited the filing of the state retirees' lawsuit as his reason for abandoning the notion of calling a special September session of the General Assembly to authorize the referendum. In addition, though, many legislators seemed to think, correctly, that it was a cockamamie idea. Such a session might well have proved as pointless as the proposed nonbinding referendum.

If such a vote were to be held, the lesson almost surely would be that places with large numbers of federal retirees are rather inclined to favor the disbursement from the state treasury of $400 million or so to federal retirees, or at least rather more so than places without large numbers of federal retirees.

Still, the thought may have promise. Exempting, say, Fords from personal-property taxes could be voted on, so as to learn that the idea is better-liked by Ford owners than by Chevy or Honda owners.

Silly? Of course. But not much sillier than Wilder's now-jettisoned referendum proposal - or much stranger than the idea that when it comes to taxes, the pensions of retired government workers are somehow more sacred than anyone else's income.

by CNB