FISCAL NOTE



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 exempt the first $20,000 of state pensions and social security benefits from West Virginia personal income tax. The bill, as written, exempts up to an additional $20,000 of pension income for PERS, the Teachers’ Retirement System and federal retirees The bill also allows the $8,000 modification in addition to the new $20,000 decreasing modification for seniors and those who are permanently and totally disabled. 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 $51.8 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. The bill does not exempt the first $20,000 of social security benefits as stated in the purpose. 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


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 -51,800,000 0


Explanation of above estimates (including long-range effect):


The bill, as written, exempts up to an additional $20,000 of pension income for PERS, the Teachers’ Retirement System and federal retirees The bill also allows the $8,000 modification in addition to the new $20,000 decreasing modification for seniors and those who are permanently and totally disabled. 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 $51.8 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. The bill does not exempt the first $20,000 of social security benefits as stated in the purpose. 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