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

DATE: TUESDAY, May 10, 1994                   TAG: 9405100142
SECTION: VIRGINIA                    PAGE: C1   EDITION: METRO 
SOURCE: DAVID M. POOLE STAFF WRITER
DATELINE: RICHMOND                                LENGTH: Medium

ASSEMBLY WON'T ACT ON PENSION DEAL

Lawmakers plan to show up Wednesday for a special General Assembly session even though leaders now say they will take no action on Attorney General Jim Gilmore's proposed tax settlement with federal retirees.

``All we're going to do is convene and recess again,'' said Sen. Stanley Walker, D-Norfolk and president pro tempore of the Senate.

Walker said he expects the issue to be postponed until September, when Gov. George Allen has called a special assembly session on abolishing parole.

For now, the settlement with 186,000 federal retirees is caught in a political face-off between the Republican team of Gilmore and Allen and leaders of the Democrat-controlled legislature.

Gilmore, backed by Allen, has proposed a $234 million settlement that would pay 50 cents on the dollar to federal pensioners taxed under a policy later found to be illegal by the U.S. Supreme Court.

Last month, legislative leaders called the offer dead-on-arrival after retiree groups demanded nothing less than a full refund.

``It's obvious to me that [Gilmore's] plan is not going to fly,'' said House Speaker Thomas Moss, D-Norfolk.

Monday, Gilmore urged legislators to act soon to settle a lawsuit filed by federal retirees. Inaction, he said, could push the state's financial exposure to more than $700 million - back taxes plus interest - if the retirees prevail in court.

Gilmore said that if legislators wish to avoid litigation, they should approve his settlement offer or come up with one of their own on Wednesday.

Democratic legislators replied that the General Assembly does not have the constitutional authority to negotiate a legal settlement.

``Now is not a bad time to settle,'' said Del. Clifton ``Chip'' Woodrum, D-Roanoke. ``But it's up to the attorney general to come up with something more acceptable.''

Retirees who didn't like the Republicans' offer welcomed the assembly's delay because it will give them time to pursue a better deal in court.

The one-day special assembly session will cost taxpayers about $19,000 if all 140 legislators show up, House and Senate clerks said. Each lawmaker gets $93 a day plus mileage.

When asked what the session is likely to produce, Petersburg Democrat Del. Jay DeBoer said: ``I believe, in legislative terms, it's called 'diddly-squat.'"

The Associated Press contributed to this report.

Keywords:
GENERAL ASSEMBLY 1994

by CNB