Support AB 46, Exemption of Military Retirement Pay from State Income Taxes

Please feel free to forward the below letter to Senate Appropriations

The Honorable Senator Portantino

Chair, Senate Appropriations Committe

The California Council of Chapters of the Military Officers Association of America (CALMOAA) is proud to be a sponsor of AB 46, a bill to provide an exemption from state income taxes on Military Retirement and Survivors Benefit Payments.  Today, California is the only state in the nation that does not provide some form of an exemption on military retirement pay.

A recently released 2021 study conducted by the California Research Bureau, California State Library on

 “National Security Economic Impact Studies states; 

California is home to the nation’s largest concentration of military personnel and other national security activity.  Approximately 168,000 active-duty military personnel and an additional 57,000 reservists and National Guard are stationed at more than 30 military installations across California.  National security agencies employ an additional 123,00 civilians in California.  In fiscal year 2020, military and other national security activity in the state generated as estimated $168.7 billion in economic activity, approximately 5.4% of California’s economy”.

Another consideration is that military retiree pay is a stream of federal revenue into the economy of the state where a retiree chose to live.  According to a DoD report to Congress as of December 2021, military retiree pay is a direct $4.1 billion-dollar annual inflation-protected stream of federal funds into the California economy.  According to a 2020 DoD Actuary, California’s military retiree population has steadily declined since 2010 and has been reduced from 165,501 to 149,430. During the same period the number of military retirees actually grew by over 4% nationwide.  Both Nevada and Arizonia realized an increase in their military population during the same period.  Both Arizonia and Nevada fully exempt military retirement from state income taxes.  As California’s military retiree population dwindles, California loses out on those $4.1 billion federal dollars along with federal dollars that support Tri-Care medical expenses, Medicare, and federal GI Bill funds that impact the enrollment in the Cal State Universities in California.   As military retirees continue to leave California that also negatively impacts staffing levels at Veterans Administration Hospitals that operate in California.  Fewer patients result in fewer doctors and medical support needed and those personnel being reassigned to other states.  Another major negative economic impact for California.

In closing, a military retiree, at an age as young as 38, brings 20 plus years of work experience to the state they chose to retire in.  This has a positive impact on that state’s workforce development.  Military retirees can help a state fill critical employment shortage in fields such as the medical profession, national security, vocational trades, aerospace and aviation industry to name a few.

Let’s work together to keep our military retirees and their families in California and join CALMOAA, the California State Veterans Commanders Council and many civic organizations who have voiced their support of AB 46. 

Please do not hesitate to contact me with any questions.


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