VA Taxpayers Association testifies
regarding huge slush fund
[Speaker's Note: While the following was our
prepared written statement distributed to all 40 members of the joint
budget committees, oral presentation of it had to be slightly edited to
come within the allotted 3-minute time limit. Of more than 100
speakers, we were number 22, arriving outside the hearing room at 8:30
a.m. for speaker sign-up beginning at noon. Hearing itself began at
Significant was that before we spoke and before any other speaker had
mentioned the Virginia Retirement System, the president of the
Virginia Education Association, regularly an opponent of taxpayers, had
stated among other things that they strongly supported Governor Warner's
statement opposing "raiding" of the VRS! So the lines on
the VRS are clearly and publicly drawn, a very welcome development to
taxpayers who outnumber the VEA!
Significant also was that at a hearing where there had been little or no
audience applause prior to speaker number 22, there WAS considerable
spontaneous applause following the end of our presentation.
VIRGINIA TAXPAYERS ASSOCIATION
P. O. BOX 663
LYNCHBURG, VA 24505
- 30 years in the cause of
FROM: Kenneth White, President
(Residence) 93 Shields Gap Rd.
Roseland, VA 22967
Tel./FAX No.: 434
Statement by Kenneth White, President
Virginia House of Delegates and Senate Joint Budget Committees
General Assembly Building
Richmond, Va., 2:20 p.m. Monday, January 13, 2003
Mr. Chairman, my name is Kenneth White and I am President of the Virginia
The big new fact that everyone at this hearing today must
realize is that it's not just the governor, the General Assembly and
special interest groups who will decide what will be done with the
Commonwealth's overwhelming financial assets at a time of heavy budget
pressures such as this.
The fact is that it is the grassroots people of Virginia not elected to
any office who will make the final decisions. It was not any of you
members of the joint budget committees who forced Governor Warner to make
his famous "spin" statement January 8 (QUOTE) "I will not
accept any budget amendments that raid the Virginia Retirement
It was the Virginia Taxpayers Association that told the governor,
legislators and citizens all around the state that the VRS is sitting on
top of a monster slush fund that has, according to the latest 2002
Comprehensive Annual Financial Report (CAFR), net assets of 32.5 billion,
even after recent bad years in Wall Street. Yet out of that 32.5
billion, VRS spent less than 1.5 billion last year in total benefits and
Most of that monster 32.5 billion fund, shown in this printed report that
most of you haven't had time to read since you received it only a few days
ago, was contributed not by state or local government employees but by the
taxpayers. Page 32, attached to our statement before you, shows that
out of total 2002 contributions of 974 million, employees contributed only
116 million, or only 12 percent.
And if you add these total contributions to the 690 million VRS received
in interest and dividends in a very poor stock market year, and then
subtract total pension benefits and refunds VRS paid out, you find VRS
actually had an operating profit last year of 200 million!
In the "Employers" only category, under Contributions, you will
note that 788 employers – i.e., the taxpayers – reduced their
contributions to VRS last year by 260 million. Yet no one called
this noticeable reduction of new taxpayer money a "raid."
Why cannot this category of new taxpayer money be eliminated altogether,
saving the taxpayers 375 million more?
The reason we call all this money a slush fund is that persons all over
the U. S. have found accumulated assets like this owned by state, local
and federal governments mount up into the trillions, (see the following
websites: www.CAFRman.com and http://www.wces.org/html_files/burien.html)
and are being used to control more and more of our nation's largest
private businesses. And experience in other states has
already documented that these excessive funds lying around are also being
used through corruption to pay off powerful persons, including all top
newspaper political reporters in at least one other state, to keep them
Now while the Virginia Constitution says VRS funds must be used
exclusively for retirement purposes, neither the Constitution nor Code of
Virginia prevents the Commonwealth from borrowing AT NO INTEREST COST from
a fund system which the Commonwealth itself owns and created.
Borrowing at no interest cost sums which can later be repaid can in no way
be described as a "raid", despite the governor's statement.
And regardless of what some employees or the governor may say, it is not
the employees but the people of Virginia who have created and contributed
most of the money in these funds who have ultimate control over use of
I can also assure you that regardless of whether any Virginia newspaper
takes note of my statement here, every word of it will be carried in full
on web pages not controlled by me but reaching to citizens not only across
Virginia but throughout the United States. So there is no way that
the new information I am bringing to you today can be kept a secret from
the public, even if you should try to do so.
No employee's or retired person's rightful pension is threatened here or
would be reduced a nickel by what I say. There is no constitutional
requirement that retirees' pensions must come totally from interest and
dividends on VRS assets, and in fact they do not do so. And payment
of such pensions would always get first call from taxpayers in regular
state budgets if needed.
But if the state budget is really critically in need of help, as now
declared in Richmond, it is urgent that massive accumulated funds which
Virginia taxpayers own and have contributed be used for the benefit of
all people in the Commonwealth, and not merely secretly kept piled up for
a chosen few.
That concludes our statement.