- Associated Press - Wednesday, January 22, 2014

DES MOINES, Iowa (AP) - A bill that would exempt military pensions from the state income tax received preliminary backing from an Iowa Senate panel Wednesday.

A Senate subcommittee approved the legislation during a brief hearing. The bill is expected to soon receive committee-level approval and move to the full Senate for a vote.

Sen. Herman Quirmbach, a Democrat from Ames, said he is pleased to support legislation that helps veterans and may bring more military retirees to the state.

“Iowa historically has had a higher percentage of its people sign up to serve and pay the ultimate sacrifice in our wars ever since we became a state,” said Quirmbach, who chaired the subcommittee. “Anything we can do to help bring our veterans … back to our state would be most welcome.”

Currently, military retirees over the age of 55 can exempt a portion of their military pensions from state income taxes. This plan would exempt all military retirement pay for all veterans. A number of neighboring states, including Kansas, Wisconsin and Illinois, already offer this exemption.

According to the governor’s office, the pension exemption would cost the state a projected $10 million in lost annual revenue.

More than a dozen veterans and advocates crowded the hearing to show support for the legislation.

“This is an economic development issue, and this is a skilled workforce issue,” said Kent Hartwig, who represents the American Legion of Iowa.

The military pension exemption is a top priority for Republican Gov. Terry Branstad, who has made support for veterans a key part of his budget plan this year. His other proposals include granting automatic in-state tuition to veterans and their families at Iowa community colleges and developing a system for giving credit for military experience when granting professional licenses.

Last fall, Branstad launched an effort to connect veterans with jobs, education and housing opportunities in Iowa.

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