Date Requested:February 16, 2012
Time Requested:03:20 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2010R1641 Introduced HB4555
CBD Subject: EXEMPT $20,000
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 provide for a phase in of exempting $20,000 of retirement income to be phased in at $4,000 per year over five years.
    
    The bill, as written, increases the decreasing modification for pension income for PERS, the Teachers’ Retirement System and federal retirees from $2,000 to $20,000, but the increase would be phased in over five year beginning in Tax Year 2012. In addition, the bill places this decreasing modification outside the calculations for the $8,000 senior citizens’ modification. Passage of this bill would result in a reduction in General Revenue Fund collections as follows:
    
    Fiscal Year--Decreasing Modification--Amount of Revenue Loss
    
    FY2013--$4,000--$8.6 million
    FY2014--$8,000--$16.2 million
    FY2015--$12,000--$24.7 million
    FY2016--$16,000--$32.5 million
    FY2017--$20,000--$40.0 million
    
    The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
    
    Additional costs to the State Tax Department would be minimal.
    

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 0 0
3. Explanation of above estimates (including long-range effect):
    The bill, as written, increases the decreasing modification for pension income for PERS, the Teachers’ Retirement System and federal retirees from $2,000 to $20,000, but the increase would be phased in over five year beginning in Tax Year 2012. In addition, the bill places this decreasing modification outside the calculations for the $8,000 senior citizens’ modification. Passage of this bill would result in a reduction in General Revenue Fund collections as follows:
    
    Fiscal Year--Decreasing Modification--Amount of Revenue Loss
    
    FY2013--$4,000--$8.6 million
    FY2014--$8,000--$16.2 million
    FY2015--$12,000--$24.7 million
    FY2016--$16,000--$32.5 million
    FY2017--$20,000--$40.0 million
    
    The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to provide for a phase in of exempting $20,000 of retirement income to be phased in at $4,000 per year over five years.
    
    The bill title is defective. In addition, the modification for the first $20,000 applies “to all returns or amended returns filed after (the) last day of December 2016". This would allow taxpayer to amend their return for prior tax years to claim the $20,000 modification.