FISCAL NOTE
Date Requested: January 25, 2022
Time Requested: 04:02 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1395 |
Introduced |
HB4384 |
|
|---|
| CBD Subject: |
Retirement |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to increase the exclusion for West Virginia Public Employees’ Retirement System participants from $2,000 to $20,000.
Although the stated purpose of the bill is to increase the exclusion for West Virginia Public Employees’ Retirement System participants from $2,000 to $20,000, the bill actually increases the exclusion from $2,000 to $20,000 for retirees from the West Virginia Public Employees’ Retirement System and the West Virginia State Teachers’ Retirement System and for federal retirees. The increase in the exclusion begins in tax year 2023. Passage of this bill would reduce General Revenue Fund collections by roughly $29.0 million in FY2024. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
Additional administrative costs would be $25,000 in FY2024 and $5,000 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2022
Increase/Decrease
(use"-") |
2023
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
5,000 |
| Personal Services |
0 |
0 |
5,000 |
| 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 |
-29,000,000 |
Explanation of above estimates (including long-range effect):
Although the stated purpose of the bill is to increase the exclusion for West Virginia Public Employees’ Retirement System participants from $2,000 to $20,000, the bill actually increases the exclusion from $2,000 to $20,000 for retirees from the West Virginia Public Employees’ Retirement System and the West Virginia State Teachers’ Retirement System and for federal retirees. The increase in the exclusion begins in tax year 2023. Passage of this bill would reduce General Revenue Fund collections by roughly $29.0 million in FY2024. The anticipated retirements of members of the baby-boom generation will result in additional escalation of costs over time.
Additional administrative costs would be $25,000 in FY2024 and $5,000 in subsequent fiscal years.
Memorandum
The stated purpose of this bill is to increase the exclusion for West Virginia Public Employees’ Retirement System participants from $2,000 to $20,000.
The bill title is defective. The title fails to indicate that the bill also increases the reducing modification for the retirees from the Teachers’ Retirement System and for federal retirees. The bill applies the increased modification to federal retirement benefits as to State retirement benefits. However, the omission of this increase in the bill title may constitute a constitutional defect.
There is no internal effective date. Pursuant to the provision of W. Va. Code §11-10-5p, the proposed change will become effective for tax year beginning on January 1, 2023.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov