Moore heralds modest tax breaks for veterans — and promises more

“We have to make sure that ‘thank you for your service’ is more than just a quote or something that we always put at the end of a sentence,” Moore, a former Army captain, said to a crowd of military personnel, lawmakers and reporters assembled beneath an enormous U.S. flag. “It’s not just that they deserve our support. It’s that they earned it. And we need them to keep serving and to stay in Maryland.”

Moore campaigned on helping the veteran community, and in January said his long-term goal was to fully exempt all military retirement income from state income taxes. He said that recently retired veterans were more likely to launch their second careers in Maryland if the tax burden was lower. His legislation proposed a more modest first step, and state legislators rolled it back further.

The Democrat-dominated General Assembly similarly scaled down his bill to give free health- and dental-care to all Maryland National Guard members and their families, creating a smaller reimbursement program instead. Moore called this “an avenue” to free benefits and said Maryland is the first in the nation to provide it. And he noted, more broadly, that the bills to help veterans and their families passed on a bipartisan basis.

“This will never be an administration that talks about what it wants to do and blames others when it doesn’t get done. That’s not leadership,” he said, hailing the tax measure as “the largest tax cut in a generation.”

Other bills signed Friday make it free for a veteran’s spouse, children or parents to be interred alongside them at state veterans cemeteries; creates an income tax checkoff that will funnel donations to a trust that benefits veterans; lets military families stay on wait-lists for state autism services even if they’re deployed elsewhere; and studies how to expedite professional licensing for military spouses who are relocating to Maryland. Typically, such ceremonies are held in the Annapolis State House.

Moore signed the bills alongside Senate President Bill Ferguson (D-Baltimore City) and House Speaker Adrienne A. Jones (D-Baltimore County), seated at a table that bore a sign proclaiming “More for Maryland.”

Ferguson said that a lot of veterans who volunteered after 9/11 are reaching 20 years of service and looking to retire. Often in their 30s or 40s, those new military veterans may want to start second careers or launch businesses, Ferguson said, adding that Maryland is making a “strategic investment” in the veterans community.

After Moore left the hanger to go to a small private conference room, where he posed for pictures and was given a brown leather bomber jacket from the Air National Guard, retired Army Col. David L. Dragics approached Moore’s staffers about what the governor planned to address next year for the military community. He was good-natured when he didn’t get a firm answer.

“They say this is a first step,” he said in an interview later. “Just like in a political campaign, it can come back to haunt you. We’re going to hold them to it.”

Dragics is the legislative director for the Maryland Military Coalition advocacy group, and he lobbied for the tax cut bill, which expands a two-tier tax break for military retirees. Those ages 55 or older can exempt the first $20,000 of military income, up from $15,000. Younger retirees can exempt the first $12,500, up from $5,000. Moore had proposed that retirees of any age would eventually be allowed to exempt the first $40,000 of military retirement income.

Dragics said it’s not enough money to sway someone to stay in the state and chalked up the scaling-back of the benefit to the legislature having to cut the budget in the face of falling revenue and rising costs for a landmark education program.

“I guess you can say it’s better than nothing,” he said of the tax breaks. “But it’s not enough. The candid answer is no, we didn’t like it. But we understood the factors behind it.”

He says Maryland is teeming with soon-to-retire military personnel with security clearances who could fill vacant civilian cyber jobs. As he puts it, “basically take the uniform off one day and come back in a suit the next.”

But why would they stay in Maryland when their retirement income will be taxed less in West Virginia, Delaware or Pennsylvania, Dragics asked. Most states do not tax military retirement income.

If Moore’s going to keep his promise to make Maryland the best state for veterans, Dragics said, it can’t keep taxing retirement income for veterans younger than 55. But when the governor walked by, Dragics didn’t mention any of his hopes for the future. Instead he razzed his fellow Army veteran for wearing an Airman’s coat.

“But it looks so good,” Moore responded. “You’ll have to forgive me.”