AARP Maryland Veterans Corner: January 2020

This month's edition of Veterans Corner is written by AARP volunteer and Navy Veteran Brian Smith.

The next Maryland General Assembly session convenes in just a few days, beginning a 90-day whirlwind. During this legislative sprint, the General Assembly often considers as many as 3,000 bills, with many of those simply failing due to a lack of time. Sadly, last year, many great veterans bills met that fate. That said, let’s take a quick look at one item that is sure to reappear, then talk about beer.

The repeat item is the full state income tax subtraction of military retirement pay. A variety of veterans organizations have pushed this issue for nearly 20 years with very limited progress. As an AARP veterans advocate, I have testified multiple times over the past two sessions on this important retirement security initiative.

The most recent movement resulted from “Hometown Heroes and Veterans Act of 2018," enacted by Governor Hogan in May of that year. The bill increased the existing $10,000 subtraction to $15,000 and reduced the eligibility age from 65 to 55. Military retirees under the age of 55 (previously 65) are eligible for a $5,000 state income tax subtraction.

This year will see another push for the full subtraction. What’s in it for the rest of us, you might ask? Well, an improved state economy for one thing!

The Positive Economic Impact of Retired Military

Another law enacted in 2018 (HB 1542) tasked the Maryland Department of Commerce to conduct a study of employment in the state’s defense industry. The study, recently released, was conducted by the Towson University Regional Economic Studies Institute.

While it is well worth your time to read, I will summarize by saying that military retirees are like the oil that keeps Maryland’s defense industry engine running smoothly. Did you realize that in the second quarter of 2019, there were over 23,000 job postings for defense-related jobs? Yet, the defense industry struggles to find qualified candidates. In fact, according to the study, each year the industry “faces a shortage of over 7,000 skilled defense workers.”

What Maryland’s defense industry needs is what military retirees bring, relevant defense-related job skills acquired over a career of service and active, high-level security clearances, because 90% of those jobs require a security clearance. Our young men and women, retiring after 20 or so years, bring a wealth of knowledge and skills, but they also know how to use calculators, they know how expensive it is to live in Maryland. The study further notes, “when compared to other states with a significant defense presence, Maryland has the second highest cost of living.”

Oh, they might take that Maryland-based defense job, but may just take that salary home to West Virginia or Pennsylvania, which do not tax military retirement pay, or to Virginia, which attracts nearly twice as many military retirees as Maryland, or to Delaware, with its lower overall cost of living. The military retiree naturally will pay some state somewhere a state income tax on that post-retirement income, but why also pay a state income tax on their military retainer? Maryland is in a competition with its neighbors for this valuable talent pool.

So, to answer the “what’s in it for me?” let’s look at some specific economic benefits that help all of us. According to the study, “spending by each military retiree household has a ripple effect in Maryland’s economy. On average, each household’s spending supports an additional:
· 0.75 jobs
· $114,928 in output
· $32,986 in employment compensation, and
· $7,550 in state and local taxes”

Wrapping this one up, our Department of Commerce has received this exceptional study and is tasked to deliver it to the General Assembly for consideration. Our military retirees await the results.

Keep in Touch!

I know, I know, you are feeling shortchanged! No news articles and no “service-dog in training of the month" Never fear, the articles will be back next month, and I will have an exciting feature about a new doggo and his relationship to a great DMV youth organization!

As I mentioned, I will be sharing my time this session between AARP Maryland and the Maryland Military Coalition (MMC). I hope you will follow us on Facebook and Twitter. Also, feel free to share info on your favorite Veteran-owned brewery with me on those social media sites! You might just see them profiled on this page.

Plan to keep in touch with your elected representatives! You voted for ‘em, now hold ‘em accountable! A great way to do that is getting involved with the AARP Maryland volunteer advocacy program! Remember, our elected representatives get zero points for holding the ball, or a bill, as the game clock expires.

You probably won’t get what you deserve,

but you just may get what you fight for!

For more veterans resources, visit AARP Maryland’s Veterans Resources page at aarp.org/mdveterans.