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

DATE: SATURDAY, January 22, 1994                   TAG: 9401220217
SECTION: VIRGINIA                    PAGE: C-3   EDITION: METRO 
SOURCE: BONNIE V. WINSTON STAFF WRITER
DATELINE: RICHMOND                                LENGTH: Medium

ALLEN SEEKS MONEY FOR RETIREES

Gov. George Allen recommended Friday that $30 million be set aside in the state's 1994-96 budget as part of a possible settlement of claims by 200,000-plus federal retirees who were illegally taxed in the 1980s.

There were no details from Allen's office on when he expects the long-standing suit to be settled or how much the state is willing to give the pensioners. They are seeking roughly $500 million in back taxes.

Following the U.S. Supreme Court's ruling last year that retired federal and military workers may be due refunds, Allen said he would seek a settlement in the case. And in his maiden speech Monday to the General Assembly, he called for a reserve fund to be established toward that end.

The $30 million reserve, to be created in 1995-96, was among a package of amendments Allen submitted Friday to the state's $32 billion spending plan. The package calls for outright agency cuts, savings and project delays to pay for $89.5 million worth of new administration initiatives.

Allen's amendments call for $23 million in additional funds to be given to Virginia's public colleges and universities to hold tuition increases to the rate of inflation, $17.4 million to increase economic-development tax credits and grants and $10.3 million to keep the Mecklenburg maximum security prison open another year.

Former Gov. Douglas Wilder's proposed 1994-96 spending plan anticipated 5 percent hikes in in-state tuition for 1994-95 followed by 4 percent increases in 1995-96. Wilder also proposed closing the Mecklenburg prison, the facility that is the most expensive to run in the state system.

Allen also proposes a 1 percent across-the-board cut for all state agencies, except education, in each of the two budget years; shifting certain state building projects financed through general funds to bond projects; and delaying bond sales by four months to save $20 million.

Paul Timmrick, Allen's secretary of finance who also served under Wilder, said nothing in the proposals can be taken as a "threat" or "personal affront" to lawmakers. He said Allen is "sincere in wanting to work with the Assembly to get the amendments adopted."

Representatives of the retirees' groups were cautiously happy about the reserve.

"It's a step in the right direction," said Oscar Honeycutt, former Virginia president of the National Association of Retired Federal Employees. "I think it shows he's trying to live up to the commitment he made during the campaign.

"But I would hope this is only a first proposal," Honeycutt said, "because $30 million is a small portion of what's due."

Keywords:
GENERAL ASSEMBLY 1994

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