THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, February 2, 1995 TAG: 9502020556
SECTION: LOCAL PAGE: B4 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: RICHMOND LENGTH: Short : 35 lines
Illegally taxed federal pensioners with claims of almost $31 million against Virginia have rejected the state's settlement offer, which means the General Assembly will have to step in to keep the deal alive.
Last summer the General Assembly offered the state's federal civilian and military retirees $351 million over five years to settle their dispute with the state.
But the assembly specified in the legislation that if pensioners with total claims of more than $20 million rejected it, then the deal was null and void unless the Assembly reauthorized it.
Gov. George F. Allen and House Majority Leader C. Richard Cranwell, D-Roanoke County, emphasized Tuesday that the rejection was not a deal killer.
The governor said the state, despite the rejection, will settle with pensioners who have agreed to take the money and settle out of court.
If Virginia had continued fighting the state's more than 170,000 pensioners in court, it faced a potential bill of more than $740 million if it lost. That includes the taxes Virginia illegally collected from the pensioners in 1985-88, plus interest.
KEYWORDS: FEDERAL RETIREES PENSION GENERAL ASSEMBLY by CNB