California Council of Chapters - MOAA

AB 53

California Team for AIA 2025. Front Left to Right: Patty Wernet, Sue Gonzales, Sharron Mackey Back Left to Right: Ramona Ch, Rina Cai, Kristen Dennis, Bill Nelson, Marvin Heinz, Jim Camaron

AB-53 Personal income taxes: exclusion: Military Services Retirement and Surviving Spouse Benefit Payment Act. pending the Senate Appropriations Committee.

Please send your support today (5 minutes)! Two letters - to the Governor and to the Senate Appropriations Chair

Mail or fastest email: Contact Me - Senator Anna M. Caballero

Senator Caballero, Chair of the Appropriations Committee
1021 O Street, Suitee 7620
Sacramento, CA 95814

Subject: Support for Governor's Military Retirement Tax Exemptions AB-53

Senator Caballero,

We thank Assemblyman Ramos for introducing AB-53 - it is a critical step toward honoring our Veterans & strengthening California’s economic competitiveness. Today, CA stands alone as the only state in the nation that fully taxes military retirement pay and Survivor Benefit Plan (SBP) annuities. Is this the message we want to send to those who have served our nation with honor & distinction? And what is the true cost to our state?

I write in strong support of AB-53 which proposes a targeted personal income tax exemption of military retirement pay & Survivor Benefit Plan (SBP) annuities for eligible CA residents. We recognize this Committee’s responsibility to carefully evaluate the fiscal impact of proposed legislation. However, rather than adding long-term cost burdens, AB-53 represents a strategic correction to an existing fiscal imbalance—one that is steadily undermining CA's economic competitiveness, eroding its revenue base, & weakening its national security workforce pipeline.

Eliminating the tax on military retirement pay is not a loss—it is an investment. CA's 140,000 retired Veterans are highly educated & trained professionals—ready to serve in critical fields such as STEM, healthcare, engineering, & public safety. Their second career brings billions of dollars to our state.

What does CA stand to lose by maintaining this outdated tax policy? Billions of dollars in:

Income from Veterans’ second careers
Federal dollars tied to Veteran services (e.g., TRICARE, VA healthcare, education)
Defense industry jobs—CA dropped from #1 to #3 in national defense contract awards
Sales & property tax revenue
Income from working spouses

We are encouraged and thank Governor Newsom for including this exemption in his FY25–26 proposed budget. It is a smart policy that honors those who served at least 20 years & who continue to serve their communities in retirement. For the good of our Veterans—& the future of CA —we urge your support of AB-53.

Your Name | Title (if applicable) | Address

-------------------------------------------------------------------------

Governor Gavin Newsom
State Capitol
Sacramento, CA 95814

Subject: Support for Governor's Military Retirement Tax Exemptions AB-53

Governor Newsom,

We thank Assemblyman James Ramos for introducing AB-53 - it is a critical step toward honoring our Veterans and strengthening California’s economic competitiveness. Today, California stands alone as the only state in the nation that fully taxes military retirement pay and Survivor Benefit Plan (SBP) annuities. Is this the message we want to send to those who have served our nation with honor and distinction? And what is the true cost to our state?

I write in strong support of AB-53 which proposes a targeted personal income tax exemption of military retirement pay and Survivor Benefit Plan (SBP) annuities for eligible California residents. We recognize this Committee’s responsibility to carefully evaluate the fiscal impact of proposed legislation. However, rather than adding long-term cost burdens, AB-53 represents a strategic correction to an existing fiscal imbalance—one that is steadily undermining California’s economic competitiveness, eroding its revenue base, and weakening its national security workforce pipeline.

Eliminating the tax on military retirement pay is not a loss—it is an investment. California’s 140,000 retired Veterans are highly educated and trained professionals—ready to serve in critical fields such as STEM, healthcare, engineering, and public safety. Their second career brings billions of dollars to our state.

What does California stand to lose by maintaining this outdated tax policy? Billions of dollars in:

Income from Veterans’ second careers
Federal dollars tied to Veteran services (e.g., TRICARE, VA healthcare, education)
Defense industry jobs—CA dropped from #1 to #3 in national defense contract awards
Sales and property tax revenue
Income from working spouses

AB-53 presents an opportunity to reverse course. Exempting modest military pensions—averaging $34,000—from state income tax would be more than offset by increased revenues from broader economic activity, income taxes, and federal funding. We are encouraged and thank Governor Newsom for including this exemption in his FY25–26 proposed budget.

This is not a giveaway. It is a smart policy that honors those who served at least 20 years and who continue to serve their communities in retirement, For the good of our Veterans—and the future of California—we urge your support of AB-53.

Thank you for your attention on this critical issue.

Your Name | Title (if applicable) | Address

California Council of Chapters - MOAA