MNGEA Legislative Report (addendum)    

23 January 2015

SF0040 was heard in the Senate tax committee on 15 Jan 15.

• Minnesota State Senator Gazelka introduced the bill as a golden opportunity to include in the omnibus tax bill. This is a perfect opportunity because there is currently a state surplus. The intent of the bill is simple, to exempt military pensions from paying state income tax.

o Predicted cost to the State is $23M

o However, when members of the military retire they start a 2nd career, or may start a business.  Both of which they will

pay income tax.

o They purchase a home and start paying property taxes.

o They bring with them other forms of federal dollars, i.e., GI bill, and spent that in             Minnesota

• WI took this measure in 2001. At the time WI gained approximately $0.8M in other income

from military retirees, currently that number is at least 5X greater.

• There are many other cost offsetting revenue sources for the State and this measure will put Minnesota on the map as more ‘military retiree friendly’
• Several retirees testified before the Senate tax committee:

o Ralph Donais, USMC

o Donald Rhoden, USAF

o Bill Route, USAF

o Jim Beckman, USA

• SF0040 was laid over for possible consideration in the omnibus tax bill

At this point it is important to gain as much momentum as possible to get the companion House file, HF0137 to the same point; hearing in House tax committee and possible inclusion in the tax omnibus bill.

MNGEA and Minnesota National Guard members, please contact your Representative to support HF0137 by signing on as a co-author. If your Representative is on the House tax committee, it is even more important to gain their support.

In addition, also inform your Senator of SF0040’s intent and to look for and support exemption of military pension in the tax omnibus bill once it comes to the floor.

Regards,

Ray Kennedy

MNGEA Vice President – Legislative