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 reduce state income taxes for state and federal retirees by increasing the exemption on retirement income in calculating the federal gross income for state personal income tax purposes.
The bill, as written, exempts the first $20,000 of pension income for PERS, the Teachers’ Retirement System and federal retirees, but the exemption is phased in over a four-year period. Revenue losses for this phase-in are as follows:
Fiscal Exemption Revenue
Year Amount Loss
2011 $5,000 $2,000,000
2012 $10,000 $7,600,000
2013 $15,000 $15,600,000
2014 $20,000 $23,600,000
There would be a small loss in FY2010 due to changes in estimated payments. 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 |
2009
Increase/Decrease
(use"-") |
2010
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 |
-23,600,000 |
Explanation of above estimates (including long-range effect):
The bill, as written, exempts the first $20,000 of pension income for PERS, the Teachers’ Retirement System and federal retirees, but the exemption is phased in over a four-year period. Revenue losses for this phase-in are as follows:
Fiscal Exemption Revenue
Year Amount Loss
2011 $5,000 $2,000,000
2012 $10,000 $7,600,000
2013 $15,000 $15,600,000
2014 $20,000 $23,600,000
There would be a small loss in FY2010 due to changes in estimated payments. 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: kpetry@tax.state.wv.us