California veterans push for exemption on military retirement pay

OAKLAND, Calif. - A group of veterans and supporters are urging the California Assembly to take up a bill that would impact military retirement pay.

Assemblymember James Ramos of San Bernardina introduced AB 46, that would exempt military retirement pay and surviving spouse benefits from state personal income tax for ten years.

"They are the only state that taxes military retirement pay," said Ramona Chavez, an Air Force veteran and member of the Military Officers Association of America, Alameda County chapter.

Chavez points out that other states offer partial or full exemptions of retirement pay for servicemembers. It’s the reality for military retirees who call California home, including the Bay Area’s Fred Jaffin, who served 28 years in the Navy.

"What makes us think twice about staying here is housing, taxes," said Jaffin. "It’s a number of other things you have to consider that makes retirement life a livable life."

Gold Star wife Suzanna Story said an exemption would make a major impact on her monthly budget.

"My husband was highly qualified, and he had a top secret clearance," said Story. "He wanted to move to a different state, the only reason he came here was because of me."

Supporters of the bill say it will also help keep servicemembers from leaving California, providing skilled workers for the state’s economy.

"We have a rich community," said Chavez. "Professionals who have been trained for 20 years and all of these STEM roles exist in California, can be filled by people who are doctors, mechanics, people with security clearance."

The bill passed the Revenue and Taxation Committee but faces challenges moving forward, with the state’s nearly $32 billion budget deficit. A fiscal analysis shows the bill would result in a revenue loss of:
-$50 million in 2023-2024 fiscal year
-$85 million in 2024-2025
-$85 million in 2025-2026

"In my opinion, it’s a small, small amount compared to the billions of dollars we’re spending in this state," said Jaffin.

The bill goes next to the Appropriations committee. They have until the end of the week to refer bills to the floor for a vote or kill the bills in committee.