By Kaitlyn Schallhorn
The Orange County Register
(TNS)
A new bipartisan effort is underway in the California Legislature to ensure veterans and survivors won’t have to pay state income tax on retirement pay and survivor benefits.
The idea is to incentivize veterans to stay in California when seeking a second career, according to Sen. Bob Archuleta, the bill’s author, whose district includes Brea and Placentia.
Senate Bill 1407 has the backing of Sen. Steven Choi, R-Irvine, as well as Assemblymember Pilar Schiavo, D-Santa Clarita, and Fiona Ma, the state treasurer.
“Veterans staying in California will pay sales, property and use taxes, benefiting local governments,” Archuleta said.
But exempting military retirement pay for retirees “will ensure California retains these highly skilled professionals and keeps the reinvestment of federal dollars and wages from second careers,” he said.
According to data from Archuleta’s office, California lost more than 24,000 military retirees between 2010 and 2022. But during that same time period, the veteran retiree population grew by 17% in the U.S., while California saw a 14% reduction, one of only five states to see a decrease in that population.
In February, Gov. Gavin Newsom signed legislation that allows veterans who get military retirement pay and families receiving federal Survivor Benefit Plan funds to exclude up to $20,000 of their income annually from their state income taxes.
The bill would remove that $20,000 cap on income eligible for exclusion.
“For too long, our veterans have been faced with a difficult decision: Stay in this beautiful state while struggling to make ends meet with rising costs of living or move to a state that financially incentivizes them to join their labor force and feed federal dollars into their economy,” Archuleta, a U.S. Army combat veteran, said.
“I’ve heard from far too many of my brothers and sisters who say California has become too expensive for them to live and say a tax exemption on their retirement pay would be the determining factor on whether they stay or leave.”
The bill was just recently introduced and has not yet been referred to a committee.
Photo caption: California State Capitol building in Sacramento (Leo_Visions/Unsplash)
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