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West Virginia voters reject bond proposal

June 26, 2005|by CANDICE BOSLEY

martinsburg@herald-mail.com

EASTERN PANHANDLE, W.VA. - Voter turnout was sparse for Saturday's special election, but those who did head to the polls seemed adamant about why the state should or should not be allowed to sell up to $5.5 billion in bonds on Wall Street.

Voters rejected Gov. Joe Manchin's attempt to repair West Virginia's ailing retirement system by selling up to $5.5 billion in bonds.

With 100 percent of the state's 1,965 precincts reporting, the pension bond measure failed 46 percent to 54 percent.

The state constitution requires an amendment for Manchin's plan to devote bond proceeds to the state's pension plans - including its teachers pension, one of the worst-funded public pension plans in the country.

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Proceeds from selling the bonds would be used to pay off existing debt for retirement plans for state employees, including judges and teachers.

Not even all teachers, however, seemed convinced.

Betsy Dove, who retired as a teacher in Berkeley County in 2003, voted against amending the state's constitution to allow for the bond sale.

"I think they'll find a way to pay us," Dove said. "I don't think (the debt) is going to hurt the West Virginia retirement system."

Dove admitted her vote was based in part on an anti-amendment campaign spearheaded by Massey Energy CEO and Chairman Don Blankenship. Blankenship used personal funds to pay for television, radio and direct mail ads, urging people to vote against the amendment.

One of Blankenship's arguments was that the state would pay up to $55 million in fees to bankers and lawyers.

"Who wants to pay that?" Dove asked.

Ellen Hardesty also voted against the amendment.

"I don't think they should change the (state) Constitution," Hardesty said of the state's politicians. "It's just going to give them permission to spend more money."

Hardesty also was not convinced of Manchin's promise that taxes not would be raised in connection with the bond sale.

"Do you believe everything a politician tells you?" she said.

Retired teacher Carolyn Elmer voted for the amendment, but said she is not convinced investing in the stock market is the wisest possible decision.

In the end, Elmer said, she voted for the amendment on the advice of others.

"It scared me when I found out they might not be able to pay us," Elmer said.

Richard Lowman said he is counting on his wife's pension plan as a teacher to sustain him since he is self-employed and has no retirement plan.

He voted against the amendment.

"The stock market is rather precarious. It just seems to be an iffy proposition," Lowman said. "There has to be a better way of securing the financial security of the state."

Lowman said he was wary of "the spin" put on by proponents of the bond sale, including the governor.

"The phrase that kept coming into my mind was 'voodoo economics,'" he said.

Kent Hedges voted for the amendment.

"I believe it's going to save the taxpayers a lot of money over the next 30 years," he said.

Manchin has said at least $1.5 billion in interest would be saved by selling the bonds.

"It we don't solve this unfunded liability problem, it's just going to get worse," Hedges said.

Hedges brushed off opponents' arguments that selling the bonds is a gamble.

"Life's a gamble," he said. "There's risk in everything."

Jessica Dorsey voted against the amendment.

Dorsey said she will not buy bonds and expect them to pay for her son's college education, and doesn't believe the state should take such a leap of faith with the stock market.

"What if the stock market crashes and we have another Depression going on?" Dorsey said.

Deanna Hardy, working as a poll worker at a precinct at Martinsburg High School, said around 10 hours after the polls had opened that less than 40 people had voted.

"Personally, I just think people aren't that interested, and they should be," Hardy said.

She also said holding the election on a Saturday likely helped to contribute to low voter turnout.

Estimated turnout for Saturday's election was between 10 percent and 15 percent, said Ben Beakes, chief of staff to Secretary of State Betty Ireland.

Voters were asked to check "Yes" or "No" on paper ballots. No major problems were reported, Beakes said.

During the last special election, which also was held on a Saturday in 1997, the turnout was 10 percent. Voters agreed to modify the constitution so the state could invest in the stock market. At the time, state officials said the change was needed to help get state pension funds out of debt without a tax increase.

West Virginia is not alone in its pension woes: The 127 state and local plans tracked by the National Association of State Retirement Administrators suffer from a combined shortfall of $279 billion.

For West Virginia and 12 other states, unfunded pension liabilities exceed the state budget.

The Associated Press contributed to this story.

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