HB 59, HCA 1 -- INCOME TAX ON GOVERNMENT PENSIONS

SPONSOR:  Boucher

COMMITTEE ACTION:  Voted "do pass" by the Committee on Ways and
Means by a vote of 12 to 5.

This bill authorizes an individual income tax deduction equal to
100% of the amount of any annuity, pension, or retirement
allowance received by a federal or state retired employee,
regardless of the amount of the allowance or the income of the
retiree.  Under current law, federal and state retirees may
deduct up to $6,000 of pension allowances received each year if
their income is not in excess of $32,000 for married or $25,000
for single taxpayers.

This bill will become effective January 1, 2000.

HCA 1 -- Includes local government employees in the proposal.

FISCAL NOTE:  Estimated Net Loss to General Revenue Fund of
$27,525,000 in FY 2000, $110,100,000 in FY 2001, and
$114,500,000 in FY 2002.

PROPONENTS:  Supporters say that this bill will reward
government employees for their service, it will bring retirees
into the state and create economic development, and will level
the pensions with those in private industry that are much higher
and sometimes offer stock option plans or bonuses.

Testifying for the bill were Representative Boucher; National
Association of Retired Federal Employees; American Association
of Retired Persons, the Retired Teachers' Association; Retired
State Employees' Association; Missouri Coalition for Quality
Care; and Silver-haired Legislature.

OPPONENTS:  There was no opposition voiced to the committee.

Bill Tucker, Assistant Director of Research

HB 59 -- Income Tax-Pensions

Co-Sponsors:  Boucher, Skaggs, Ransdall

This bill authorizes an individual income tax deduction equal to
100% of the amount of any annuity, pension, or retirement
allowance received by a federal or state retired employee,
regardless of the amount of the allowance or the income of the
retiree.  Under current law, federal and state retirees may
deduct up to $6,000 of pension allowances received each year if
their income is not in excess of $32,000 for married or $25,000
for single taxpayers.

This bill will become effective January 1, 2000.