By Howard Fischer | Capitol Media Services via Arizona Capitol Times
By the barest margin, a Senate panel voted Wednesday to give an additional break in state taxes to military retirees despite the potential loss of $15 million in revenues.
SB 1167, approved on a 4-3 bipartisan vote by the Finance Committee, would permit those who have served for at least 20 years to exempt $10,000 of their pensions from the state income tax. That quadruples the current $2,500 exemption.
About 55,000 of the state’s estimated 550,000 veterans would qualify.
Sen. Gail Griffin, R-Hereford, told colleagues they should not look at her proposal as a tax break but as a “workforce development bill.”
“Military retirees bring with them diverse skills, education and experience that Arizona desperately needs,” she said.
More to the point, Griffin said people can retire as young as 38, meaning they are ready for a second career. And she said that any income they get from their civilian jobs would be fully taxable, as would what their spouses earn.
Not everyone views the issue that way. Sen. Steve Farley, D-Tucson, worried that the state would end up with lower tax collections, money he said is needed for education and other state services.