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Complete benefits will be phased in over the next three years with pensioners receiving 50 percent of theirbenefit in 1989, 75 percent of their benefit in 1990, and 100 percent in 1991.
For example, a pensioner with $22,000 in retirement income would be entitled to a $7,000 benefit this year, $10,500 next year, and the full $14,000 subtraction beginning in 1991.
Social Security benefits remain exempt under the plan. In addition, a $3,000 income exclusion for filers who do not received social security is scheduled to go into effect January 1, 1990. Also, the existing age credit for taxpayers 62 years or older, having less that $2,000 retirement income, is retained.
The pension tax plan will cost the state $69 million this year and $80.4 million next year. In 1991, with the benefits at 100 percent, the cost iscalculated by the State Department of Finance at $87.6 million.
The funds for this year will be taken from the $70.7 million Revenue Reserve Fund set up by the Assembly during the regular '89 session. "I don’t know what more you could ask the conferees to do for you,” Del C. Richard Cranwell, D14th District, told the House after he and the other conferees had labored throughout the day to reach a
73.5%