The Senate Appropriations Committee is set to decide on AB 46 today. (Photo: Udo S.)

 

UPDATE: The Senate Appropriations Committee has filed AB 46 in suspense and the Legislature will vote on the bill at a later date.

A bill that would exempt Veterans’ military pensions from California income taxes for at least the next decade appears to be gaining traction with both parties in the state legislature. 

Assembly Bill 46, which was introduced by Asms. James Ramos (D-45), Devon Mathis (R-33), and Esmeralda Soria (D-27), aims to reverse the recent trend of California Veterans leaving the state in search of a lower cost of living. Since 2020, at least 500,000 Veterans have left California while neighboring states such as Nevada — which does not tax any income — have seen their Veteran population soar.

Currently, California is the only state that fully taxes military pensions. Under AB46, this would be set to change. 

Proponents of the bill expect the state to lose around $85 million in tax revenue each year if AB46 passes; however, they also believe this is much less of a financial burden on the state than a continued exodus of Veterans. During a Senate Appropriations Committee hearing earlier today, however, the California Department of Finance voiced its opposition to AB 46 on the grounds that the true cost of the bill would be upwards of $150–$250 million per year.

AB 46’s supporters dismiss the financial concerns, noting that Veterans have earned their retirement pay and that every bit helps as California remains one of the costliest states in the country.

The California Legionnaire will update this post once the Appropriations Committee’s Aug. 14 hearing results are released publicly. 

Christian Southards
Author: Christian Southards

Coming from a family with a proud military background and wanting to contribute his writing skills to a worthy cause, Christian began writing for the California American Legion in August of 2020. His father is a 25-year Army Veteran and his grandfather served in the Navy during Vietnam.