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

DATE: TUESDAY, February 22, 1994                   TAG: 9402220115
SECTION: VIRGINIA                    PAGE: C-3   EDITION: METRO 
SOURCE: BONNIE V. WINSTON STAFF WRITER
DATELINE: RICHMOND                                LENGTH: Medium

ALLEN CALLS FOR RETIREE SETTLEMENT

Gov. George Allen renewed his call Monday for an out-of-court settlement in the multimillion-dollar lawsuit by federal and military retirees for refunds of illegally collected state income taxes.

Meeting with reporters at the Capitol, Allen said it is "in the best interest of taxpayers" to settle the case.

Figures released Friday by the administration indicated that the pensioners may be owed $707.5 million in back taxes and interest, or almost $200 million more than previous estimates.

Allen would not comment on the settlement discussions between Attorney General Jim Gilmore and attorneys for the retirees. Nor would he discuss what he called "the accuracy" of reports that the pensioners have been offered 30 cents on each dollar owed by the state.

However, Allen said the revised estimate of what the retirees are owed "means clearly we'll have to pay it out over a period of years and not in a lump sum."

Allen acknowledged that the higher liability creates "a tough situation for the attorney general" at the bargaining table.

The governor said he told key House and Senate lawmakers about the revised figure Friday. He said he wanted not only "to reveal the truth, but to show there's a serious concern" about the pensioners and a need for the $30 million settlement fund he has requested as part of the state's 1994-96 budget.

The House Appropriations Committee turned thumbs down on Allen's request and did not include any money for it in the budget plan it approved Sunday.

The Senate Finance Committee provided for the settlement fund, but the money would have to come from any surplus left in the current budget, ending June 30.

by CNB