Many veterans likely scratched their heads reading the Star Tribune’s June 21 editorial “A wasteful Minnesota tax break on military pensions.” As strong supporters of this historic tax break for those who have dedicated much of their careers to serving our country, we write to offer a different perspective.
Let’s be perfectly clear; letting Minnesota veterans keep the full pension they earned through their military service is anything but wasteful:
• $90 million office buildings for politicians are wasteful. Pay raises for commissioners who already receive six-figure salaries are wasteful.
• $23 million to exempt military pensions from state taxes is just a fraction of the potential fraud and abuse the nonpartisan legislative auditor believes is being wasted on those who are not eligible to receive benefits every year on our various public health programs such as MNsure.
If the Star Tribune Editorial Board is looking for waste in state government, there are plenty of prime targets for future editorials.
This bill, authored by Rep. Josh Heintzeman, R-Nisswa, received hearings in both the tax and veterans affairs committees. I am proud to have carried the bill in the past, carrying the torch passed to me from my predecessors. The topic has been an issue at the Legislature for much of the past two decades. It was not introduced at the 11th hour, as the Star Tribune would have its readers believe.
This bill was included as part of the supplemental budget bill passed with bipartisan support in the House and the Senate, and was signed into law by Gov. Mark Dayton last month.
Prior to this new law, Minnesota was one of just three states that offered no tax exemption whatsoever for military pensions. With this exemption now in effect, Minnesota is now in good company among the most veteran-friendly states in the nation.
In order to receive a military pension, you must serve our nation for 20 years or be medically retired.
Who does that affect? In total, it’s expected that 18,000 Minnesota veterans will be able to keep more of the pension they earned serving our country. Many veterans who receive a pension leave the service in their early 40s — their prime earning years — and become highly productive contributors in the workforce.
Minnesota-based companies such as Cargill actively recruit veterans because of their work ethic, resourcefulness and productivity. At a time when Minnesota desperately needs skilled workers to fill job openings, this tax exemption will make our state a more attractive place for veterans to relocate or remain once their service career has ended.
The editorial cited Wisconsin’s military retiree population growing from 0.28 percent of the total population to 0.34 percent after that state passed a full military retirement benefits exemption.
What the editorial fails to recognize is that this so-called “small difference” represents a 20 percent increase in Wisconsin’s military retiree population. It means Wisconsin gained more than 1,000 productive, well-trained military retirees. That’s 1,000 more taxpayers who contribute to the economy, buy homes, start small businesses and more.
The pension exemption is obviously encouraging veterans to move to Wisconsin, and we expect a similar, if not greater, rise in military retirees in the future for Minnesota.
Over the coming weeks, I will be traveling the state to meet with veterans and their families to discuss this historic legislation. Members of the Editorial Board should perhaps hit the road and talk to Minnesota veterans about the impact this legislation will have before wrongly assessing this policy as “wasteful.”
Perhaps the most important reason for passing this exemption is that it was simply the right thing to do. It’s a small way for us to thank our veterans for their service and sacrifice. Veterans are a small but crucial building block of Minnesota’s economic success. Let’s thank them instead of chastising them.
State Rep. Bob Dettmer, R-Forest Lake, is chair of the Minnesota House Veterans Affairs Division. This commentary was co-signed by state Rep. Josh Heintzeman, R-Nisswa; state Rep. Greg Davids, R-Preston; Eric D. Ahlness, retired colonel, Minnesota Army National Guard; Lori A. Ahlness, retired major, Minnesota Army National Guard; Ralph Donais, retired master gunnery sergeant, U.S. Marine Corps, and Jerry Kyser, retired sergeant, U.S. Army.