Date Requested:January 14, 2012
Time Requested:01:10 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1425 Carry Over HB2364
CBD Subject: ONE-TIME SUPPLEMENT FOR CERTAIN ANNUITANTS
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 reduce state income tax liability for certain retired public employees and increase the amount of retirement income received from certain state and federal retirement systems that is excluded from the calculation of income subject to state personal income taxes.
    
    The bill, as written, increases the decreasing modification for benefits received under PERS, the Teachers’ Retirement System and federal retirement from $2,000 to $4,000. In addition, the bill increases the maximum modification for senior citizens and those who are permanently and totally disabled to $16,000 if the person receives benefits from PERS or the Teachers’ Retirement System or military or federal retirement systems. The changes in the bill are effective for tax years beginning after December 31, 2010. The provisions of this bill would reduce General Revenue Fund collections by roughly $22.2 million in FY2013. The change in the modification for Tax Year 2011 returns will result in amended returns. The revenue loss for FY2013 includes the loss for those amended 2011 returns as well as the loss for Tax Year 2012 returns. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
    
    Since passage of this bill would result in the processing of additional refunds in Fiscal Year 2013 due to amended returns, additional costs to the State Tax Department would be significant.
    
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2012
Increase/Decrease
(use"-")
2013
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 -22,200,000 0
3. Explanation of above estimates (including long-range effect):
    The bill, as written, increases the decreasing modification for benefits received under PERS, the Teachers’ Retirement System and federal retirement from $2,000 to $4,000. In addition, the bill increases the maximum modification for senior citizens and those who are permanently and totally disabled to $16,000 if the person receives benefits from PERS or the Teachers’ Retirement System or military or federal retirement systems. The changes in the bill are effective for tax years beginning after December 31, 2010. The provisions of this bill would reduce General Revenue Fund collections by roughly $22.2 million in FY2013. The change in the modification for Tax Year 2011 returns will result in amended returns. The revenue loss for FY2013 includes the loss for those amended 2011 returns as well as the loss for Tax Year 2012 returns. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
    
    Since passage of this bill would result in the processing of additional refunds in Fiscal Year 2013 due to amended returns, additional costs to the State Tax Department would be significant.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov