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Editorial - Crucial vote due Sept. 27

August 26, 1997

It's nearly the end of summer, and if we had to guess, we'd bet that most people have been preoccupied with squeezing in a last few days at the beach, or with buying back-to-school clothes for their children. Too busy, in fact, to think about West Virginia's special election on Sept. 27.

If this is the first you've heard of it, that's okay. But if you choose to ignore it, know this: How much you pay in taxes will depend on an election that a little more than a month away.

The only question on the ballot will be whether the state can invest its funds in the stock market. If you think that's an obscure financial question that doesn't concern you, consider these facts:

- States that invest their employee pension funds in the stock market get an annual return of 13 percent. West Virginia, restricted by its constitution to the bond market, gets only 3 percent.

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- Because of the low yields, the taxpayers had to put $315 million in general revenues to support the pension funds this year. Next year, state officials say, the cost will be $50 to $100 million.

- State employee pension funds are underfunded by $4 billion, and a decision to default would probably lead to a mass exodus of younger state employees and a class-action suit by those with many years' time in.

- The only alternative to a change in the state investment policy is a tax increase, according to Gov. Cecil Underwood and House Speaker Bob Kiss, D-Raleigh.

Despite that, a Charleston, W.Va., newspaper poll found that 42 percent of those asked about the ballot question said they would vote against it, with just 35 percent in favor.

When we editorialized on this topic two weeks ago, the plan was to publicize the issue through a group of business and labor organizations. It's clear now that's not enough, and we urge elected officials to speak out today on this topic.

Why? Because other than West Virginia, only South Carolina bars its government from the stock market. It's time for West Virginia to leave this outdated policy behind, and begin getting a decent return on its investments.

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