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

DATE: FRIDAY, April 15, 1994                   TAG: 9404150087
SECTION: VIRGINIA                    PAGE: B-1   EDITION: METRO 
SOURCE: Associated Press
DATELINE: RICHMOND                                LENGTH: Medium

ALLEN SAYS TAKE IT OR LEAVE IT

``Any individual who doesn't want to settle doesn't have to,'' Allen said. Retirees unhappy with the offer can take the matter to court, he said.

Attorney General Jim Gilmore has offered about 186,000 civilian and military retirees refunds amounting to half the $486 million they paid in state taxes later judged illegal.

The retirees would not receive the $250 million in interest that has accrued on the disputed taxes paid from 1985 to 1988.

A group of illegally taxed retirees said Wednesday it would lobby the General Assembly for a more generous settlement. Lawmakers will consider the offer at its veto session next week.

``We're looking to get back what we paid in,'' said Jack Mayer, a retired colonel who is secretary-treasurer of the Military Retirees Taxpayers' Association.

Allen said he opposes increasing the settlement.

``I support the attorney general's proposal,'' he said.

If the assembly endorses the offer, the Virginia Tax Department will mail sign-up forms to pensioners in the next few weeks. There would be four equal payouts over four years, with the first check due Dec. 1.

About 67 percent of the retirees would receive a total of $3,000 or less.

Allen said he has talked to many retirees who want to take the money and drop the case. He said those pensioners are not as vocal and do not get as much attention as those who oppose the settlement.

The General Assembly changed its taxation policy after the U.S. Supreme Court ruled that it is unconstitutional for states to tax the pensions of the federal work force while exempting the benefits of their state and local counterparts.

But the high court left to Virginia courts the decision of what refund, if any, the federal pensioners are owed. An Alexandria judge this year denied them any refund, and the pensioners have appealed to the Virginia Supreme Court.