Tax bill goal: Out of the military and into Minnesota

by Howard Lestrud

ECM Political Editor

Legislation aimed at attracting military service men and women back to Minnesota for second careers was proposed Thursday (April 4) by Sen. Paul Gazelka, R-Cass County, before the Tax Reform Division of the Senate Committee on Taxes.

Committee members listened to Gazelka and three people giving testimony relate reasons why veterans’ military pensions should be exempted from income tax. Thirty-one other states have some form of exemption, Gazelka explained to the committee. Gazelka is carrying Senate File 32, which provides a Minnesota income tax subtraction for military retirement pay, to the extent included in federal taxable income.

Sen. Paul Gazelka, R-Cass County,  at left and Ralph Donais spoke in support of Senate File 32 about subtraction for military retirement pay when appearing before the Tax Reform Division of the Senate Committee on Taxes on Thursday (April 4).  (Photo by Howard Lestrud, ECM Publishers)

Sen. Paul Gazelka, R-Cass County, at left and Ralph Donais spoke in support of Senate File 32 about subtraction for military retirement pay when appearing before the Tax Reform Division of the Senate Committee on Taxes on Thursday (April 4). (Photo by Howard Lestrud, ECM Publishers)

This bill, or in some other form, has been before the Minnesota Legislature the past eight years. Gazelka is optimistic about the bill’s chances of being part of the omnibus tax bill.

Following testimony of three members of the United Veterans Legislative Council, Taxes Committee Chairman Sen. Rod Skoe, DFL-Clearbrook, offered encouragement that something could be accomplished this session. He suggested looking at the current state tax credits and possibly doing it on an incremental basis.

“We do have a deficit to solve first,” Skoe said.

Before the committee, Gazelka said these military retirees have 20 years or more of expertise that should be retained as a value to the state of Minnesota. “These people are not a burden to the state but a blessing,”Gazelka said. “It is a win-win-win situation,” he added.

Ralph Donais, chairman of the United Veterans Legislative Council, expressed dismay that not enough incentives were being offered to military retirees to move back to Minnesota after completing their military careers. He said, in completing questionnaires recently, military people checked only two of 11 positive reasons for coming back to Minnesota for a second career.

“We want these second-career people to come back to Minnesota,” Donais said.

Jerry Kaiser, vice chairman of the United Veterans Legislative Council, said these military noncommissioned officers (NCO) and officers are looking for second careers and are highly motivated people with entrepreneurial  attitudes.

These are people who have risen to the top and should be kept in the Minnesota employment pool, said Doc Severson, former state legislator and a current lobbyist for the United Veterans Legislative Council. He said these retirees still have 20-30 years to contribute to society.

“They have significant skills,” he said.

By helping bring military retirees and their spouses back to Minnesota, the state is offering an opportunity to create jobs, Severson said.

Tax Reform Committee member Sen. Julieann Ortman, R-Chanhassen, said she has been an ardent supporter of this legislation since it was first introduced. She called it the best economic development program that encourages retired military people to come back to Minnesota.

Ortman told about her young son currently being in the U.S. Army and receiving highly technical training that could have value to the state in future years.

“This is a no-brainer,” Ortman said. “Why on earth can’t we get this done and add it to the omnibus bill?”

Minnesota currently ranks 33rd for where members of the military locate after retirement.

“We want their career to be here,” Gazelka said.

Rep. Bob Dettmer, R-Forest Lake, is carrying this legislation in the House.

 

Howard Lestrud can be reached at howard.lestrud@ecm-inc.com 

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