THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, March 3, 1995 TAG: 9503030023
SECTION: FRONT PAGE: A10 EDITION: FINAL
TYPE: Editorial
LENGTH: Short : 41 lines
Virginia was among 23 states affected by a 1989 U.S. Supreme Court ruling that states could not tax federal workers' pensions while exempting their own retirees'.
With the 1995 General Assembly's recent approval of new terms to settle the matter and Governor Allen's signature on the measure, the first checks are to be mailed by March 31. Refunds to 147,258 retirees, amounting to about 76 percent of pension-tax payments from 1985 through 1988, will ultimately total $306 million.
The commonwealth's motives were not pernicious; it was merely trying to ease retirement years for its underpaid workers. This was a pact between employer and employee.
Still, this represented a failure by the state to meet its responsibility to its workers. When rumblings began years before the court decision, the commonwealth might have rescinded the special treatment of its own retirees' pensions - pay had improved considerably - but the commonwealth didn't.
Because of its protracted inaction, perhaps the state deserves its headache. While the practice itself ended in '89, not until last year did Virginia agree to partial payments - and then only if taxes due retirees who refused the compromise did not exceed $20 million. The 14,258 who continue to demand full repayment plus interest account for $47 million; hence the need for the new legislation.
But the number accepting and the number fighting don't embrace all retirees. Another 348 waived their refunds. They say the state can keep their money.
Given the acrimony of this particular debate and public disenchantment with government generally, we're surprised that there are so many good-spirited people out there. It's refreshing to learn that there are. by CNB