The Compton Chamber and its strategic partner, "For the Love of Our Veterans," are in full support of this crucial legislation, which would finally bring California in line with the rest of the country in providing tax relief to military retirees. After at least eight previous attempts in the Legislature, this bill represents a long-overdue effort to correct an unfair policy that makes California the only state in the nation that fully taxes military retirement income.
Assemblymember James Ramos has reintroduced a bill that would allow military retirees earning under $125,000 annually to exempt up to $20,000 of their federal pension income from state taxes. A similar bill has been introduced in the Senate by Sen. Kelly Seyarto. This is a scaled-back version of previous efforts that aimed to exempt the entirety of veterans’ pensions, demonstrating a compromise approach to addressing the issue.
California’s Shameful Status as the Only State to Fully Tax Military Pensions
California stands alone as the only state that still fully taxes military retirement pay. Even states with high taxes, such as New York and Oregon, offer partial or full exemptions to their veterans. The fact that California, home to the Navy’s Pacific Fleet, Camp Pendleton, and some of the largest military communities in the country, has failed to provide any tax relief to its retired service members is unacceptable.
This failure has had real consequences—California has experienced a 28% decline in its retired military population since 2000, one of the sharpest drops in the country. High costs of living and the state’s failure to support its veterans have driven many to states that actively recruit military retirees through tax incentives and economic benefits. Veterans bring valuable skills and leadership to industries across the state, yet they are often forced to leave because California refuses to acknowledge their service financially.
Financial Impact & Critics' Arguments
Governor Gavin Newsom has included a similar proposal in his budget, estimating that the exemption would cost the state about $130 million in the first year and $85 million per year thereafter. However, the Legislative Analyst’s Office has argued that the tax break may not be large enough to stop the exodus of military retirees, questioning its effectiveness. Additionally, some opponents worry that offering a tax exemption to veterans may create pressure to extend similar benefits to other professions, such as teachers, firefighters, and police officers.
The Time for Change is Now!!!
Despite these concerns, supporters of the bill emphasize that the issue goes beyond just financial incentives. California must send a clear message that it values and respects its veterans. Keeping veterans in the state strengthens our communities and workforce, while recognizing their sacrifices in a meaningful way.
The Compton Chamber and "For the Love of Our Veterans" stand firmly in support of this bill. It is unacceptable that California remains the only state in the nation that refuses to provide tax relief to its veterans. The passage of this legislation is not just a step in the right direction—it is a moral obligation.
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