State lawmakers and advocates are again working to eliminate state income tax on military retirement and survivor benefit pay.
Senate Bill 1407 is the latest in a series of bills introduced over the last several years in the state legislature. None have been successful, although last year's state budget included a $20,000 tax break for military retirees and beneficiaries.
The new bill would eliminate that $20,000 cap.
State Sen. Bob Archuleta, who co-authored the bill, said military retirees leave California after their military careers, and this would help keep them.
"(Senate Bill) 1407 sends a message — sends it to California, sends it to our leadership … to our veterans," he said at a news conference Wednesday on the flight deck of the USS Midway Museum.
"We value your service," Archuleta said. "We value your commitment to California and we value the future that you give California."
If passed the bill would cut $100 million in revenue to the state for the first year and $65 million each of the next two, according to an estimate by the state Franchise Tax Board.
State Sen. Catherine Blakespear said that loss could be offset by enticing more retirees — who often move on to second careers — to stay in California.
"If we did exempt this, we would be able to keep those people and then would have (tax) revenue coming in from the second job," she said. "So, you know, it could end up actually resulting in more money."
Similar bills were introduced in the legislature in 2023 and 2025 and were unsuccessful.
Archuleta said more than 125,000 military retirees live in California.
