Gov. Mike Leavitt is misleading the public by telling them that it is fair to pay federal retirees $13 million less of their illegally taken money than state law and the court ruling require.
Consider these facts:1. The governor states that Utah made only 6 percent on retirees' money held during 1985-93 and so retirees should be paid only 6 percent interest on the owed money instead of the 12 percent required by law. You have to wonder who was doing the investing. If the state had paid the retirees their money in April 1989, when the U.S. Supreme Court ruled that this money must be paid, retirees could have earned 15 percent per year on the average stock market investment. Also, this would have saved Utah taxpayers millions in legal and interest fees.
2. During the period 1985-93, the buying power of the dollar decreased by 30 percent. This is a real loss to federal retirees on their owed money.
3. The court ruled that retirees must pay their attorney fees even though they won the case. This is an unfair expense caused by the state's penchant for futile litigation and must be taken into consideration.
4. Utah illegally taxed federal retiree pensions during years 1974-84 but this money cannot be recovered because of the three-year statute-of-limitation law. With interest, the federal retirees involuntarily donated about $50 million to the state. If the governor wants to be fair, he would voluntarily pay the federal retirees this illegally taken money.
5. The Utah law requires that 12 percent interest be paid not only on the money the state owes taxpayers (federal retirees) but also on any money taxpayers owe the state. The reason 12 percent interest remained in effect for so long was that Utah was receiving millions more in interest income than it was paying out. If the governor feels that it is fair to pay federal retirees only 6 percent on their money, does he think he should be fair and reimburse all of the taxpayers who paid the state 12 percent on the money they owed on their late taxes during years 1985-93?
From the above, it is apparent that the governor's proposal to federal retirees is neither fair or legal. The state is continuing to try to unfairly penalize and intimidate federal retirees.
Robert Barker
Layton