Date Requested: January 28, 2015
Time Requested: 01:55 PM
Agency: State Tax & Revenue Department
CBD Number: Version: Bill Number: Resolution Number:
1786 Introduced HB2079
CBD Subject: Tax


FUND(S):

General Revenue Fund, Seniors Helping Seniors Fund

Sources of Revenue:

General Fund,Special Fund

Legislation creates:

A New Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    The stated purpose of this bill is to create the Seniors Helping Seniors Fund. Personal income taxes paid on taxable Social Security benefits are to be deposited into this fund. The fund is to be used by the Department of Health and Human Resources and the Bureau of Senior Services for the Medicaid Aged and Disabled Waiver program and to support the Medicaid Personal Care, Family Assistance In-Home Respite and Lighthouse programs to increase the number of senior citizens receiving in-home care services.
    
    According to the provisions of the bill, the Seniors Helping Seniors Fund would be created in the State Treasury. The portion of taxes paid by the taxpayer attributable to income received as taxable Social Security benefits would then be deposited by the Tax Commissioner into the Seniors Helping Seniors Fund. Passage of the bill would result in up to $80.0 million for the Seniors Helping Seniors Fund in FY2017 with a corresponding loss of up to $80.0 million to the General Revenue Fund. The anticipated retirements of members of the baby-boom generation will result in additional revenue for the Seniors Helping Seniors Fund and escalation in the revenue loss to the General Revenue Fund.
    
    Additional administrative costs to the State Tax Department would be $5,000 for FY2016, $40,500 in FY2017 and $30,000 per year thereafter.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2015
Increase/Decrease
(use"-")
2016
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 5,000 30,000
Personal Services 0 0 30,000
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 5,000 0
2. Estimated Total Revenues 0 0 -80,000,000


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


    Passage of this bill creates the Seniors Helping Seniors Fund. Personal income taxes paid on taxable Social Security benefits are to be deposited into this fund. The fund is to be used by the Department of Health and Human Resources and the Bureau of Senior Services for the Medicaid Aged and Disabled Waiver program and to support the Medicaid Personal Care, Family Assistance In-Home Respite and Lighthouse programs to increase the number of senior citizens receiving in-home care services.
    
    According to the provisions of the bill, the Seniors Helping Seniors Fund would be created in the State Treasury. The portion of taxes paid by the taxpayer attributable to income received as taxable Social Security benefits would then be deposited by the Tax Commissioner into the Seniors Helping Seniors Fund. Passage of the bill would result in up to $80.0 million for the Seniors Helping Seniors Fund in FY2017 with a corresponding loss of up to $80.0 million to the General Revenue Fund. The anticipated retirements of members of the baby-boom generation will result in additional revenue for the Seniors Helping Seniors Fund and escalation in the revenue loss to the General Revenue Fund.
    
    Additional administrative costs to the State Tax Department would be $5,000 for FY2016, $40,500 in FY2017 and $30,000 per year thereafter.
    



Memorandum


    The stated purpose of this bill is to create the Seniors Helping Seniors Fund. The fund is to be used by the Department of Health and Human Resources and the Bureau of Senior Services for the Medicaid Aged and Disabled Waiver program and to support the Medicaid Personal Care, Family Assistance In-Home Respite and Lighthouse programs to increase the number of senior citizens receiving in-home care services. The proposed bill places a large administrative burden on the Tax Department since all income tax returns which have social security income must be recalculated. There is no provision for the increased administrative costs or increased personnel hours.
    
    It is unclear what is meant by using the highest rates possible to the amount of social security income, specifically for married filing jointly taxpayers.
    
    In addition, the proposed bill places a tax compliance burden on senior citizens who would have to supply additional information on their tax returns and a significant administrative burden on the State Tax Department to determine the amount to be deposited into the Seniors Helping Seniors Fund.
    
    
    



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov