131st MAINE LEGISLATURE
		LD 457		LR 2184(02)
	An Act to Amend Maine's Tax Laws
	Fiscal Note for Bill as Amended by Committee Amendment " "
	Committee: Taxation
	Fiscal Note Required: Yes
Fiscal Note
			FY 2023-24	FY 2024-25	Projections  FY 2025-26	Projections  FY 2026-27
Net Cost (Savings)
	General Fund		$0	$22,812,000	($17,812,500)	($19,076,000)
Appropriations/Allocations
	General Fund		$0	$39,836,000	$0	$0
Revenue
	General Fund		$0	$17,024,000	$17,812,500	$19,076,000
	Other Special Revenue Funds		$0	$896,000	$937,500	$1,004,000
Fiscal Detail and Notes
	The provisions included in this legislation will result in a net cost to the General Fund of $22,812,000 in fiscal year 2024-25 and net savings to the General Fund of $17,812,500 in fiscal year 2025-26 and $19,076,000 in fiscal year 2026-27.
	First, this bill establishes a phaseout of the individual income tax pension deduction for non-military pensions based on the taxpayer's adjusted gross income for tax years beginning on or after January 1, 2024. It will increase General Fund revenue by  $17,024,000 and increase Local Government Fund revenue by $896,000 in fiscal year 2024-25.
	This bill also provides that, for fiscal year 2024-25 only, the cost-of-living adjustment (COLA) awarded to retired state employees and teachers and their beneficiaries applies to the first $40,000 of the retirement benefit. According to the Maine Public Employees Retirement System, this provision will create an unfunded actuarial liability (UAL) totaling $39,836,000 that, pursuant to the Maine Constitution, will have to be funded immediately. This bill includes a one-time General Fund appropriation in that amount to the Retirement Allowance Fund within the Maine Public Employees Retirement System in fiscal year 2024-25 to pay for the cost of the COLA provision.