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 increase in this modification from $2,000 to $22,000 would reduce General Revenue Fund collections by roughly $27.0 million beginning in Tax Year 2010. 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.
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 |
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 increase in this modification from $2,000 to $22,000 would reduce General Revenue Fund collections by roughly $27.0 million beginning in Tax Year 2010. 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. The bill, as written, allows the $8,000 modification in addition to the new $20,000 decreasing modification for seniors and those who are permanently and totally disabled, but surviving spouses must include the additional $20,000 modification in calculating the $8,000 modification. In addition, under this proposal, a surviving spouse may claim an additional $8,000 exclusion in addition to the $8,000 exclusion for being a senior citizen.
There would be no additional administrative costs.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kpetry@tax.state.wv.us