General Fund ($2,475,786) ($32,690,279)

Other Funds (133,051) (1,756,801)

This income modification for certain pension benefits will decrease individual income tax collections by $2,608,837 in fiscal year 1999-00, $34,447,080 in fiscal year 2000-01, $27,937,907 in fiscal year 2001-02 and $29,242,979 in fiscal year 2002-03. The reduction of these tax collections will decrease the amounts transferred to the Local Government Fund for state- municipal revenue sharing in those years by $133,051, $1,756,801, $1,424,833 and $1,491,392, respectively. The resulting net reductions of General Fund revenue will be $2,475,786 in fiscal year 1999-00, $32,690,279 in fiscal year 2000-01, $26,513,074 in fiscal year 2001-02 and $27,751,587 in fiscal year 2002-03.

The Bureau of Revenue Services will incur additional costs estimated to be $23,290 in fiscal year 2000-01 and $36,000 annually beginning in fiscal year 2001-02 for a Tax Examiner position, effective January 1, 2001, and related expenses to audit individual income tax returns affected by this income modification. A General Fund appropriation of $23,290 in fiscal year 2000-01 is included to fund these additional costs.

SUMMARY

This bill provides an income tax deduction for public and private pension income to the extent that the pension income, together with social security benefits and railroad retirement benefits, does not exceed $10,000. The bill makes no change to the current law that exempts all social security and railroad retirement benefits from state income tax.