States that invest their employees' pension funds in the stock market reap an annual return of 13 percent. West Virginia, constitutionally barred from investing in anything but bonds, gets 3 percent, according to House Speaker Bob Kiss, D-Raleigh, who wants voters to change that arrangement in a special election to be held on Sept. 27.
We agree with Kiss, not only because the state and its retirees should get the benefit of soaring stock prices, but because without the change, the only alternative is to raise taxes.
That's no idle threat, because West Virginia's employee pension plans are underfunded by $4 billion with $3.7 billion of that total coming from the Teachers Retirement System. It will cost the state $315 million from general operating funds to prop up the system this year. If voters choose to "cling to an archaic investment strategy," Gov. Cecil Underwood told The Associated Press, a tax increase is "certainly probable."