DES MOINES —
Gov. Terry Branstad and state lawmakers are billing an effort to enhance services for veterans as a way to attract new residents to Iowa, but it’s tough to gauge if this push will really have an impact on the state population.
Legislators in the Iowa Senate are poised to approve a bill that would fully exempt military pensions from state income taxes. Lawmakers are also supportive of other plans from Branstad to connect veterans with jobs, education and housing.
“We think it’s a great opportunity to bring people to Iowa,” said Democratic Senate Majority Leader Mike Gronstal, of Council Bluffs. “How big an impact it will have, we’ll have to implement some of these changes and see where it goes.”
Others question how much such efforts can really do.
“Nobody’s going to turn down a tax break if you give it to them. But in fact there are lots of factors that go into why an individual or a business locates wherever they do,” said Mike Owen, executive director of the liberal-leaning think tank Iowa Policy Project.
This effort comes during a quiet policy year in the state Capitol. Branstad is running for re-election in 2014, as are all members of the Iowa House and half of the state senators. Most are focused on quickly resolving the state budget and tackling a few consensus issues like the veterans bills, before hitting the campaign trail.
Politicians from all parties typically want to be on record backing the troops, said Donald Inbody, a senior lecturer of political science at Texas State University.
“Everyone wants to show how much more they’re supporting veterans than the other guy,” said Inbody, who served in the Navy for 28 years before retiring in 2006.
Nearly 240,000 veterans reside in Iowa. Branstad’s effort to attract more vets to the state is called “Home Base Iowa.” 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.
“I believe Iowa can offer our nation’s veterans something even greater than a square deal. We can offer them a better opportunity to live the Iowa Dream,” said Branstad in his annual Condition of the State speech several weeks ago.
Currently in Iowa, veterans over the age of 55 can only exempt a portion of their military pension from state income taxes. Military retirement pay is exempt from income taxes in 26 states, according to the governor’s office. That includes neighboring states of Kansas, Wisconsin and Illinois, as well as states like Texas that don’t levy income taxes.
James McDonough, a retired Army colonel who led the New York State Division of Veterans Affairs for three years, said people retiring from the armed services weigh the benefits available in different states.
“Publications like The Military Times, which we read religiously, publish a guide on the best places to retire and one criteria is how do I protect my pension,” said McDonough, who now works at the Institute for Veterans and Military Families at Syracuse University.
Still, McDonough said that other factors like family and job opportunities can also play a big role in that decision.
“I think family trumps all,” he said.
According to the governor’s office, Iowa’s pension exemption would cost the state a projected $10 million in lost annual revenue. Owen questioned the cost of the perk.
“The governor has said it’s important to be able to find good paying jobs, send kids to a good school, have safe neighborhoods. That is paid for by taxes,” Owen said.
Benefits for veterans vary from state to state, but many offer job and education programs. States that offer tax credits to businesses that hire veterans include Delaware, Illinois and New Mexico. In Maryland last year, Gov. Martin O’Malley signed legislation that speeds up the professional licensing process for veterans and military spouses who hold professional licenses in other states.
Peter Feaver, a political science professor at Duke University who studies military issues, said pursuing veterans is an understandable strategy, though he acknowledged it may not move “gobs and gobs” of people.
“If you’re a governor and looking to boost your economy, it’s not a bad segment to woo,” Feaver said. “By virtue of the way their career paths go, they don’t develop strong regional ties. They can and do select state localities strategically.”