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 $10,000 of state pensions and social security benefits from West Virginia personal income tax with an increase to $10,000 for retirees who are sixty-five years old or older.
The bill, as written, allows the $8,000 senior citizens modification in addition to the decreasing modification for federal retirees and retirees receiving benefits from PERS or the West Virginia Teachers’ Retirement System. The bill exempts the first $10,000 of pension income for PERS, the Teachers’ Retirement System and federal retirees who are under the age of sixty-five and exempts the first $15,000 of pension income for retirees from those plans who are over age sixty-five. The provisions of this bill would reduce General Revenue Fund collections by roughly $17.5 million in FY2009. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
There would be no additional administrative costs associated with the change in the modification for current tax years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2008
Increase/Decrease
(use"-") |
2009
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 |
-17,500,000 |
0 |
Explanation of above estimates (including long-range effect):
The bill, as written, allows the $8,000 senior citizens modification in addition to the decreasing modification for federal retirees and retirees receiving benefits from PERS or the West Virginia Teachers’ Retirement System. The bill exempts the first $10,000 of pension income for PERS, the Teachers’ Retirement System and federal retirees who are under the age of sixty-five and exempts the first $15,000 of pension income for retirees from those plans who are over age sixty-five. The provisions of this bill would reduce General Revenue Fund collections by roughly $17.5 million in FY2009. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
There would be no additional administrative costs associated with the change in the modification for current tax years.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us