Assemblyman James Ramos introduced Assembly Bill 46 in the 2023 California legislature to exempt Military Retirees and Surviving Spouses from California income tax on military retirement pay. California is the only state in the country that fails to provide any form of tax relief despite having the largest number of assigned active-duty military members in this state and ranked fourth in the U.S. in the number of military retirees.

AB-46 has significant support regardless of party. But it needs support from all citizens. The Appropriations Committee will review this bill around mid-April 2023, and without their approval, the bill will not go to the Assembly for a vote. Please show your support for this legislation by sending an email or letter of support to Chairman Chris Holden and the Appropriations Committee. An email letter can be uploaded at: approps.committee@assembly.ca.gov. Or mail your letter to: Chairman Holden, Assembly Appropriations Committee, 1021 O St. Suite 8220, Sacramento, CA 95814. Every letter and email are important as our representatives are counting the number of responses received on this matter.

Why should you support this bill? Military retirees (primarily enlisted members) routinely join the work force after retirement in their early 40s and their skills are needed for hard to fill California jobs in the medical field, biochemistry, AI, cybersecurity, engineering, management, and more. The anticipated need for these skilled workers will grow by 2% each year. Every other state continues to recruit military retirees away from California and California continues to lose retirees at an accelerated rate. These other states realize that this is a skilled workforce that has economic development value, and they don’t tax military retiree pay.

Military retirees pay taxes on their second career earnings, which will likely well exceed their military retirement pay. Instead of losing a taxpayer and family, California could be retaining taxpayers with increased earnings and family tax revenues. In a short time, AB-46 will raise total state tax revenues and retirees and their families contribute sales and property taxes.

Another consideration is that military retirement pay is a stream of federal revenue into the state economy where a retiree chooses to live. According to a study conducted by the Governor Gavin Newsom’s Military Council, the defense industry contributed $168 billion to California’s economy in 2021, 5% of the state’s budget. The Department of Defense estimates that military retirees and their surviving spouses bring $4.8 billion, annual inflation-protected stream of federal funds to the state each year. Already Virginia, Florida, and Texas receive more than $6 billion each year in federal military retiree income and California is now falling behind.

AB-46 honors those who dedicated their lives to serve their country, and their surviving spouses and families. It helps the state retain and attract uniformed-service retirees to strengthen the state’s skilled workforce and contributes to the state and local tax base.

Susan Stewart Capt., U.S. Navy is president of the Alameda County Chapter of the Military Officers Association of America.