~ $51 million package includes military income and pension tax exemption ~

Saint Paul – Building on his foundation of support for military families and veterans, Governor Pawlenty today announced 35 initiatives to provide additional services and assistance for those who have courageously served in the nation’s armed forces and for Minnesotans now on active duty. The $51 million package will be presented to the legislature when it convenes in February, 2008.

“We need to say ‘thank you’ to our veterans not just with our words, but by our actions,” Governor Pawlenty said. “We must continue to show our gratitude for the more than 400,000 veterans who make Minnesota their home. I again look forward to bipartisan legislative support for these initiatives.”

The Governor’s package includes 15 new initiatives and 20 proposals to continue or expand existing programs and services for veterans and military personnel. A combination of on-going and one-time funds are proposed to finance the initiatives.

The Governor’s 2008 Military and Veterans Support Package includes proposals to expand and enhance veterans services, address tax issues, provide additional educational benefits, and advance initiatives focused on businesses that employ veterans

100% Exemption from State Income Tax for Military Pay and Pensions

To reward their service, help recruit future soldiers, and to encourage veterans to make Minnesota their home, Governor Pawlenty proposes to fully exempt military income and pensions from state income tax.

Minnesota soldiers and veterans would be allowed to subtract 100 percent of their pay for military service, military pensions and retirement payments when computing state income tax. These payments are currently considered taxable income. Current members of the military, military retirees and survivors of military retirees will be allowed to claim the exemption. It also covers the pay of all active duty service members who claim Minnesota as their state of residence.

Minnesota’s tax law previously provided for a military pension exclusion for veterans of up to $11,000. This exclusion was repealed in 1987. Forty-two other states currently have some degree of tax exemption for military pensions. The exemption will be phased-in over a four year period and is expected to save veterans and military members $6.3 million in taxes in the first year (FY 2009) and approximately $25 million annually (FY 2012) when fully phased-in.

Military and Veteran Services

• LinkVET linkage line funding - The LinkVet linkage line is a toll-free number which veterans can use to connect with veteran services officers that can help veterans and their families with an array of services such as benefits. This funding will continue the operation of the vital toll-free hotline service, including program software, crisis connection contract, staffing, and training. ($220K)

• Funding for state veterans case workers – The case mangers will provide comprehensive individual assistance to veterans and will coordinate services for veterans, military members and their families. ($500K)

• “Support Our Troops” license plate – This successful license plate sales program supports services for veterans and military families. Unfortunately, spending resulting from sales is currently capped at $338,000 annually. The Governor proposes to eliminate the cap so that all funds generated by the license plates can be spent on veterans programs.

• State “Navigators” – This team of people will coordinate state agency programs and activities to support and assist soldiers and their families during the reintegration process and beyond. ($300K)

• State Soldier Assistance Program supplemental funding - Additional cash assistance will be provided to this essential program, which provides assistance to soldiers in need by making emergency payments for housing, utilities, and other personal needs. ($2.5M)

• Veteran Claims Office - Funding would be increased for outreach and training to improve services and benefits to veterans. This includes adding a female Veterans Service Officer/Coordinator. ($250K)

• County Veterans Services Office training coordinator – New positions will be created to focus on CVSO training, coordination, and grant oversight. These roles will help create performance standards and accountability for our statewide system. ($250K)

• The Veterans Assistance Offices on Campus Program - This program will be expanded to ensure veterans, military members, and their families have access to higher education financial aid and benefits. It would increase the number of Campus Representatives for broader assistance statewide. It will also keep the My MilitaryEducation.org website and the accompanying toll-free call center operational. ($715K)

• Traumatic Brain Injury (TBI)/Post Traumatic Stress Disorder (PTSD) outreach and education - Existing federal screening programs will be promoted for veterans and a follow-up study about future mental health needs of returning veterans with PTSD and TBI will be conducted. ($250K one time)

• Veteran Affairs marketing - The Governor proposes to enhance the existing statewide marketing plan in order to further raise awareness regarding benefits and services available for veterans and their families. ($100K)

• CVSO grant increase – The Governor proposes to build upon his successful initiative to provide additional funds to county veterans service offices. These competitive grants from the state can be used by counties for a variety of purposes, such as reducing homelessness, reintegration of combat veterans and emergency assistance. ($500K)

• Funding for the Minnesota Assistance Council for Veterans (MACV) - This nonprofit organization that has been helping veterans and their families affected by homelessness in Minnesota for over 14 years will receive additional funding. ($250K)

• The “Proud to be a Veteran” license plate program - The funds collected for this plate will be expanded to include motorcycles and the law will be amended to allow for funds to be used for future veteran memorial programming.

• Secure land for a new state veteran’s cemetery in Northern Minnesota Duluth-area - The federal government will pay for the planning/design and construction costs. The state will be responsible for securing the land and the cemetery’s ongoing maintenance and upkeep.

Employer Focused Initiatives

• State enhancement of the Employer Support of the Guard and Reserve program – The Governor proposes a state match that creates an employer recognition program for spouses of military members similar to the current recognition for employers of members of the military. (FY08- $75K, $35K ongoing) 

• Unemployment Insurance costs incurred by employers - Funds from the Unemployment Insurance pool would be redistributed from within the pool to businesses that employ deployed soldiers, in order to pay unemployment insurance costs for the soldiers’ long-term replacements.

• State contracting for businesses owned by members of the military - Businesses owned by veterans would be included as a preferred group by the state in awarding state contracts. (FY 08-09 $356K $179K ongoing)

• Service Member Civil Relief Act rules – A federal program that governs the legal protections of military members concerning termination of residential leases, automobile leases, evictions from leased housing, installment contracts, interest rates, court proceedings, enforcement of obligations, liabilities, and taxes will be applied to veteran and/or spouse-owned small businesses.

• Protection of Reservist owned businesses during mobilization – This protection includes a delay on any lawsuits directed at businesses owned by active duty members of the military until 6 months after the end of mobilization

• The Veteran’s Business Assistance Program – Minnesota’s small businesses would be allowed to qualify for assistance if they have sustained economic injury because an owner or essential employee has been called to active duty as a military reservist. ($1 million)

• Spouse protection under Uniformed Services Employment and Reemployment Rights Act (USERRA) – This provision would allow similar protections under USERRA for spouses of service members, including discrimination, benefits and time off.

• Hiring/training incentive for businesses that employ veterans – An initiative for employers that allows for a reimbursement of up to 50% of the first $10,000 in salary or training expenses will provide veterans with on-the-job training. Minnesota reserve and guard members would be eligible, as would other recent members of the military to encourage relocation to Minnesota. ($1 million)

Additional Proposals

• Tuition Reimbursement Program would be expanded to allow spouses to use up to 12 semester hours of unused service member benefits for each year of service. (FY10 - $392K, FY11 - $441K, FY12 - $490K, FY13 - $539K, then level.)

• Medic Qualifications Bonus of $1000 for National Guard medics who meet recertification requirements. This provides for a larger pool of qualified EMTs throughout Minnesota. ($135K annual)

• Expand current law property tax exclusion for homesteads of disabled veterans.

• Out-of-state service by National Guard members would be treated in the same manner as other Military Reservists regarding an exemption from state income taxation. ($120K)

• Deferment of any special assessment for deployed service members until six months after they return from deployment.

• Military Voting Package to provide the essential components to facilitate absentee military voting in elections.

• Power of Attorney law amended to promote more restrictive powers and requiring accounting of records.

• Veteran Sentencing Education through an outreach and information model focusing on use of treatment and probation where appropriate. The Minnesota Department of Veterans Affairs will host forums on alternative sentencing for county attorneys, judges and legislators. ($200K)

• Establish a Camp Ripley Land Fund to manage timber and provide for increased use of the land by military forces while more historically recreating the ecosystems.

• Amend the Brevet promotion statute to waive the 10 year service requirement for those killed in action, or those who died during the course of serving on State Active Duty.

• Increase charitable gambling contributions to Veteran Service Organizations through a simplification of charitable gambling rules and reducing redundant auditing requirements.

Earlier this year, Governor Pawlenty signed the Agriculture and Veterans Omnibus Bill to support members of the military. Provisions included:
• Veteran Affairs communication and outreach - $3.4 million.
• State Reintegration initiative - $1.5 million
• Increase County Veterans Service Officers grants - $1.5 million
• Armory maintenance program – $2 million
• General Support appropriation increase - $560,000
• Special assessments - $185,000
• Higher Education offices - $900,000
• State Soldier Assistance Program - $2 million
• Department of Veteran Affairs administration - $500,000
• Veteran organization funding - $500,000
• State veteran cemetery - $150,000
• Starbase Minnesota- $175,000
• Depleted Uranium health screening - $200,000
• Honor Guard reimbursement- $260,000
• World War II State Capitol Memorial dedication - $250,000
• Veterans counseling and toll-free telephone hotline- $80,000
• Department of Veteran Affairs technology upgrades - $200,000

Governor Pawlenty’s previous initiatives that have been enacted include:
• 100% tuition reimbursement for members of the National Guard, college credit for military training and experience, and in-state tuition rates for all veterans.
• “Support our Troops” license plates.
• Legislation protecting families from protestors at military funerals.
• Appointment of a Military and Veterans Support Governor's Cabinet.
• Veterans Summit attended by more than 700 participants.
• The Yellow Ribbon Task Force using inter-agency work groups to focus on returning veteran issues.
• Increase of $2 million for State Soldiers Assistance Program.
• One stop website for veterans programs.