Arizona Senate votes to keep state taxes on veteran pensions

Associated Press
February 26, 2020 - 9:52 am
Ducey

Arizona Department of Veterans Services

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By Bob Christie

Associated Press

PHOENIX (AP) — The Arizona Senate on Tuesday rejected Republican Gov. Doug Ducey's proposal to exempt military pensions from the state's income tax.

The GOP-controlled Senate shot down the stand-alone proposal that would cut state revenue by an estimated $45 million. Four Republicans joined all 13 Democrats in opposing the measure, although they offered differing reasons.

One Republican was absent, and GOP Sen. David Gowan supported the measure but changed his vote to “no” to preserve his right to ask the full Senate for another vote. That made the vote 11-18.

The defeat doesn't mean the tax cut won't make it into a final budget deal now being negotiated with majority Republicans in the House and Senate and the governor.

Republicans voting no included Michelle Ugenti-Rita, David Farnsworth, Eddie Farnsworth and J.D. Mesnard. 

Eddie Farnsworth and Mesnard said they opposed the measure because they support broad-based tax cuts, not carve-outs for special groups.

“I don't think the members of the military fought so that they could get free stuff,” Farnsworth said.

Democratic Sen. Andrea Dalessandro said she had taken a vow to oppose any tax cuts as long as the state was underfunding schools and other programs that support children. Democrats have embraced that mantra for several years, even as majority Republicans regularly enact tax cut measures.

Ducey proposed eliminating state income taxes on pensions for military veterans in his January State of the State address, giving veterans an average savings of $840 per year.

Some who spoke Tuesday said the biggest beneficiaries would be high-ranking retirees who don't need the tax break because their pensions are large.

But GOP Sen. Sonny Borrelli, a retired Marine, said that most retirees aren't officers but instead are average grunts like him.

“They earned this pension overseas. They earned this pension on foreign soil,” Borrelli said. “It's not too much to ask. If the federal government's not going to be taxing them, why should we? We don't tax social security. Why would we tax a military pension?”

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