A perennial bill to exempt military retirement pay from state income taxes has the support of Gov. Susana Martinez, despite the Legislature’s defeat of similar bills in the past.
Senate Bill 96, introduced by Sen. William E. Sharer, R-Farmington, would exempt 25 percent of a military retiree’s pension in 2014, 50 percent in 2015, 75 percent in 2016 and 100 percent in 2017 and beyond.
At a Monday news conference at the New Mexico Veterans’ Memorial before an estimated 150 attendees, Martinez couched the proposal as a way to stimulate the state’s economy.
“I think it would grow the economy because they (new military retirees) are still young and well trained,” the governor said. “They can come here for our high-tech jobs or open a businesses of their own, and the tax base will grow.”
State officials estimate there are about 20,000 military retirees in the state and 3,000 surviving spouses who would qualify for the tax exemption.
According to the Legislative Finance Committee’s fiscal impact report on Sharer’s bill, the exemption would reduce state coffers by $3.1 million next year, $9.6 million in 2015, $16.5 million in 2016 and by $24 million in 2017 and successive years. The current bill has no sunset provision, meaning it would remain in effect until the Legislature changed it.
Similar bills have appeared before legislators for years, but none has made it into law.
Aside from the impact on state revenues, critics of those bills have said they’re unfair to other government employees and that giving veteran retiree pay a pass on taxation simply shifts the tax burden to other New Mexicans.
“I certainly don’t believe that we pass the tax burden on to other citizens of New Mexico because, if we end up seeing our economy grow, then you end up seeing that that tax dollar is being brought into New Mexico,” Martinez said after the news conference. “We’re not shifting it from one to another.”
Martinez said her administration has found additional revenues that will enable the state to “pass on that tax break to those who deserve it the most, the men and women in our military.”
An identical bill passed the House last year but never came to a vote in the Senate.
Martinez said she also backs identical bills — HB 180 by Rep. Rodolpho S. “Rudy” Martinez, D-Bayard, and SB 258 by Sen. William F. Burt, R-Alamogordo — that would fast-track professional licensure of military service members, their spouses, or recent veterans who are licensed in other jurisdictions.
The governor introduced Charlene Templet, the wife of an Army captain assigned to White Sands Missile Range, who, despite having three master’s degrees and holding a professional counseling license in Missouri, has been unable to work as a professional counselor in New Mexico.
Templet said New Mexico’s licensure process is too lengthy and cumbersome for proven professionals licensed elsewhere, and that the states bordering New Mexico have reciprocal agreements to accept such licenses from other jurisdictions.
“This is just good, common sense legislation,” Templet said, noting that the state’s licensure requirement has kept her from working since she and her husband arrived here six months ago.
Distributed by MCT Information Services