Date Requested:January 14, 2011
Time Requested:02:11 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1895 Introduced SB75
CBD Subject: RETIRED TEACHER'S RETIREMENT TAX EXEMPT
FUND(S)
General Revenue Fund
Sources of Revenue
General Fund
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    The purpose of this bill is to exempt income received by retired teachers through the State Teachers Retirement System from personal income taxes.
    
    The bill, as written, allows a decreasing modification for the full amount of pension income received from the State Teachers Retirement System and moves the decreasing modification outside the calculations for the $8,000 senior citizens’ modification. Passage of this bill would result in a decrease in General Revenue Fund collections of $17.8 million beginning in FY2014. The anticipated retirement of members of the baby-boom generation will result in additional escalation of costs over time.
    
    There would be no additional administrative costs.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
    The bill, as written, allows a decreasing modification for the full amount of pension income received from the State Teachers Retirement System and moves the decreasing modification outside the calculations for the $8,000 senior citizens’ modification. Passage of this bill would result in a decrease in General Revenue Fund collections of $17.8 million beginning in FY2014. The anticipated retirement of members of the baby-boom generation will result in additional escalation of costs over time.
    
    There would be no additional administrative costs.
    
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The purpose of this bill is to exempt income received by retired teachers through the State Teachers Retirement System from personal income taxes.
    
    This provision may be unconstitutional under the provision that taxes shall be “equal and uniform throughout the state”. It may violate the Constitution as the decreasing modification is only available to retired teachers, not to other individuals such as survivors who could receive pension income from the State Teachers Retirement System.
    
    There is also concern that additional preferential treatment for a large group of state and local government retirees relative to federal civil service retirees would conflict with the U.S. Supreme Court ruling in Davis v. Michigan.