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 1 p.m.   

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.

Kenneth White]


VIRGINIA TAXPAYERS ASSOCIATION          
P. O. BOX 663
LYNCHBURG, VA 24505

-  30  years  in  the  cause  of  freedom  -


FROM:   Kenneth White, President
        (Residence) 93 Shields Gap Rd.
        Roseland, VA 22967
        Tel./FAX No.:  434  277-5255
        E-mail:  KWhite9472@aol.com


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 Taxpayers Association.

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 System" (UNQUOTE). 

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 refunds.

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 quiet.

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 these funds.

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.

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