FISCAL NOTE

Date Requested: February 10, 2017
Time Requested: 01:07 PM
Agency: Tax & Revenue Department, WV State
CBD Number: Version: Bill Number: Resolution Number:
1292 Introduced HB2110
CBD Subject: Retirement


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 increase from $2,000 to $20,000 the amount of retirement income to be excluded from the gross income of individuals receiving retirement benefits under the West Virginia Public Employees Retirement System and the West Virginia State Teachers Retirement System. The bill also provides an effective date. The bill, as written, increases the decreasing modification from $2,000 to $20,000 for benefits received under PERS and the Teachers= Retirement System beginning with Tax Year 2017. Passage of this bill would reduce General Revenue Fund collections by roughly $17.1 million in FY2018. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time. Additional litigation by less favored groups would result in a significant increase in administrative costs to the State Tax Department. In particular, additional preferential treatment for a large group of state and local government retirees relative to federal civil service retirees would conflict with the U.S. Supreme Court ruling in Davis v. Michigan.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
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 -17,100,000 0


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


The bill, as written, increases the decreasing modification from $2,000 to $20,000 for benefits received under PERS and the Teachers= Retirement System beginning with Tax Year 2017. Passage of this bill would reduce General Revenue Fund collections by roughly $17.1 million in FY2018. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time. Additional litigation by less favored groups would result in a significant increase in administrative costs to the State Tax Department. In particular, additional preferential treatment for a large group of state and local government retirees relative to federal civil service retirees would conflict with the U.S. Supreme Court ruling in Davis v. Michigan.



Memorandum


The stated purpose of this bill is to increase from $2,000 to $20,000 the amount of retirement income to be excluded from the gross income of individuals receiving retirement benefits under the West Virginia Public Employees Retirement System and the West Virginia State Teachers Retirement System. The bill also provides an effective date. There is concern that additional preferential treatment for a large group of state and local government retirees relative to federal civil service retirees would conflict with the U.S. Supreme Court ruling in Davis v. Michigan.



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