THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Sunday, January 15, 1995 TAG: 9501150061
SECTION: LOCAL PAGE: B8 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: RICHMOND LENGTH: Short : 44 lines
About half the federal retirees whose pensions were illegally taxed by the state have responded to Virginia's offer, and more than 90 percent have accepted it.
In order to settle the long-running dispute out of court, the state has offered the pensioners about $351 million during the next five years. If pensioners with claims exceeding $20 million reject it and continue the court fight, however, the deal is void unless reauthorized by the General Assembly.
The state Department of Taxation said Friday that 80,579 of the 168,583 pensioners eligible for the settlement so far have responded. Of them, 76,329 have agreed to accept the offer. The value of their claims is more than $198 million. The rough value of all eligible pensioners' claims is about $459 million.
But 4,105 retirees, whose claims exceed $10.3 million, have rejected the deal and decided to be bound by the pending court case.
``It's too early in the process to make any observation about what it may mean for the settlement,'' said Ken Stroupe, chief spokesman for Gov. George Allen.
An additional 145 pensioners accepted the settlement but told the state to keep their money, totaling almost $191,000. Deadline for responding to the state offer is Feb. 1, and the first payment to pensioners is scheduled for March 31.
At the urging of Allen, the General Assembly last summer put together the settlement plan, offering about 77 cents on the dollar to the retirees. The U.S. Supreme Court has ruled that states may not tax the pension of federal retirees if they do not tax the pensions of former state workers. The court did not order a refund, but sent the case back to a state court for further hearings. All told, the state's potential liability - taxes paid plus interest - is about $740 million for the period from 1985 to 1988. by CNB