Senator Anna M. Caballero
Chair, Senate Appropriations Committee
California State Capitol, Room 412
Sacramento CA 95814

Please Keep Veterans in California, Support AB-46:  Military Services Retirement and Surviving Spouse Benefit Payment Act

Senator Caballero,

I am writing in support of Assembly Bill 46, Exemption of Military Retirement from State Income Taxes, introduced by Assemblyman James Ramos during the 2023 session.  California has more military bases than any other state and over 160,000 military personnel assigned to those bases. Billions of Department of Defense dollars flow into California every year to support our military and military retirees. In addition, military retirees provide an experienced workforce for critical professions in California. Data estimates that California has lost over $200 million dollars to the state's economy annually due to the declining military retiree population. According to a recent report over 500,000 veterans have fled California to other states. How much has that cost California's economy?

Assemblymember Ramos recognizes the importance of retaining our experienced and skilled military retiree workforce in California and introduced AB 46 in 2023 to provide an exemption from state income tax to military retired pay and military survivor benefits in California.  AB 46 was passed by the Assembly last session with overwhelming bipartisan support, because it makes good fiscal and common sense!  Military retirees, according to DoD data, provided over four billion dollars to California's economy in 2021.

The State's Finance personnel painted a negative picture of the direct costs, in terms of lost tax revenues, when testifying before your committee on AB 46 last session.  But, they fail to provide data that details, or even considers, the much greater loss of billions of federal dollars that come into California's economy to support those military retirees, such as VA Hospital funding, Medicare, Tricare to name a few.

I am extremely grateful for elected officials such as James Ramos, Bob Archuleta, Shannon Grove, Brian Dahle, Jacqui Irwin and others who have voiced strong support for AB 46.  Congressional Representative Adam Schiff has even written a letter of support, citing the billions of dollars that will flow into California's economy by keeping military retirees in California.  Let’s stop this exodus of a highly skilled and experienced workforce and federal dollars to other states and remove the stigma of California being one of the most tax “unfriendly” states for military retirees to call home.

Respectfully,
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