Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, March 1, 1991 TAG: 9103010806
SECTION: VIRGINIA PAGE: A-1 EDITION: EVENING
SOURCE: The Associated Press
DATELINE: RICHMOND LENGTH: Short
The court's decision upheld a ruling by Alexandria Circuit Judge Donald H. Kent, who had said the refunds would create "inequity, injustice and hardship."
About 200,000 retired federal workers live in Virginia. State legislators, who last week passed budget amendments offsetting a $2.2 billion shortfall, have been worried about how they would come up with money for refunds if the Supreme Court ruling went against them.
However, the court said that "Virginia's taxing statute was legitimate until a new rule was announced" in the Michigan case. "In weighing the equities, considerable deference must be accorded a state's reliance upon a statute that was presumptively valid," the court said.
"An important equitable consideration is the effect that retroactive application of a judicial decision may have on a state's financial stability," the court said.
The U.S. Supreme Court's ruling in the Michigan case in March 1989 prompted lawsuits in at least 17 of the 23 states that have taxed federal pensions at a higher rate than state retirement pay.
by CNB