Date Requested:January 22, 2011
Time Requested:10:54 AM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1550 Introduced HB2733
CBD Subject: TAX CREDIT FOR SCHOOL PERSONNEL
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 stated purpose of this bill is to permit any income derived from the West Virginia State Teachers Retirement System received by each individual retired public school teacher and service personnel, as well as any income received by each individual active public school teacher and service personnel pursuant to the carrying out of their duties in such positions to be subtracted from federal adjusted gross income for state personal income tax purposes.
    
    The bill, as written, would exempt all pension income received from the State Teachers’ Retirement System and all income received by active public school teachers and school service personnel from West Virginia Personal Income Tax. If the bill is interpreted to only include pay received by teachers and school service personnel from their employment by county boards of education, there would be a loss of revenue to the State General Revenue Fund of at least $60.2 million per year beginning in Fiscal Year 2013. If the bill is interpreted to include all income received by teachers and school service personnel, the impact would be greater. There could be some revenue decrease in Fiscal Year 2012 due to changes in withholding and estimated payments.
    
    There would be no additional administrative costs associated with this bill.
    

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, would exempt all pension income received from the State Teachers’ Retirement System and all income received by active public school teachers and school service personnel from West Virginia Personal Income Tax. If the bill is interpreted to only include pay received by teachers and school service personnel from their employment by county boards of education, there would be a loss of revenue to the State General Revenue Fund of at least $60.2 million per year beginning in Fiscal Year 2013. If the bill is interpreted to include all income received by teachers and school service personnel, the impact would be greater. There could be some revenue decrease in Fiscal Year 2012 due to changes in withholding and estimated payments.
    
    There would be no additional administrative costs associated with this bill.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to permit any income derived from the West Virginia State Teachers Retirement System received by each individual retired public school teacher and service personnel, as well as any income received by each individual active public school teacher and service personnel pursuant to the carrying out of their duties in such positions to be subtracted from federal adjusted gross income for state personal income tax purposes.
    
    This provision may violate the Constitutional provision that “taxation shall be equal and uniform throughout the state”. The bill only provides a broad-based reduction for earnings in one public sector and for some retirees. Also, it is unclear whether public school administrators qualify for this exemption.