LINCOLN, Neb. – This week marks the opening of the First Session of the 106th Nebraska Legislature. As State Senators return to Lincoln, I will be working with them to launch a series of initiatives to help grow opportunities for Nebraskans. Many of these initiatives, along with my budget recommendation to the Legislature, will be highlighted during my annual State of the State address. I encourage you to tune into the address, which will be streamed live at www.netnebraska.org, at 10:00a.m. on Jan. 15. Ahead of my annual State of the State address, Senators and I will be making some announcements previewing a few of our proposals. Starting this week, I will also be featuring several of these initiatives in my columns.
Nebraska’s veterans stepped up to serve our country, and we want to keep them in the Good Life after they retire. My first proposal would help our state take a big step towards our goal of being the best state in the nation to be a veteran or serve in the military. Last week, the Nebraska Department of Veterans’ Affairs, the Nebraska National Guard, and I unveiled a new plan to deliver expanded tax relief for veterans who receive military retirement benefits.
This new proposal, which will be introduced by Senator Tom Brewer of Gordon, would exempt 50 percent of military retirement pay from Nebraska’s state income tax. The exemption would cover the more than 13,000 Nebraskans receiving military retirement benefits from the Department of Defense. Overall, our plan would deliver $15 million annually in tax relief for our state’s retired military veterans.
Tax relief for Nebraska’s veterans is important for three reasons. First, we want to acknowledge the sacrifice our veterans and their families have made for their service over the years. They have put their lives on the line to serve our country and to protect our freedoms. We want to say “thank you,” and this tax relief helps us do that.
Second, we need to make our state more competitive regionally and nationally. Across the nation, 29 states exempt military retirement benefits from taxes, including five of Nebraska’s six neighbors: Kansas, Missouri, Iowa, South Dakota, and Wyoming. Additionally, North Dakota announced they were looking into creating new tax exemptions for their veterans just last month. What does this mean for Nebraska? Veterans are leaving our state for states with lower taxes. At our announcement event last week, one senator shared anecdotes about her constituents moving across the river to Iowa.
The third reason we need to deliver new tax relief for our veterans: Our existing, limited tax break for military retirement benefits is clunky and unjust. Right now, our tax code provides a limited exemption for a handful of newer retirees and excludes veterans who retired before July 2012. Furthermore, the current law as written excludes some retirees who served in the Nebraska National Guard or in the Reserves from taking advantage of it.
To retain our retired veterans and to make our tax code more fair, we need to take this step to deliver new tax relief for them. I look forward to working with the Legislature on veterans’ tax relief in the coming months.
This new proposal builds on our extensive work with veterans groups and Senators over the last few years to make our state a better place to live for our servicemen and women. Two years ago, we merged state agencies to create a unified Department of Veterans’ Affairs to provide a higher level of service for our veterans. This month, veterans are preparing to move into a new state-of-the-art home in Kearney. We have also cut red tape for the spouses of active duty military from other states who hold professional licenses in occupations, such as teaching. This allows talented professionals to work in Nebraska when their spouse is deployed here. These are just a few examples of the great work being done across our state to honor our heroes. If you would like to learn more about the work we have been doing for veterans, you can visit my website, which is listed below.
With the start of the legislative session, there will be many bills under consideration by Senators. I encourage you to follow www.Governor.Nebraska.gov for updates and action alerts on important bills. We will need your help to get initiatives such as veterans’ tax relief passed. If you want to support this important effort, please consider contacting your Senator. You can find all their information at www.NebraskaLegislature.gov. Let them know you stand with Nebraska’s veterans.