Fite fights for military pay exemption

State Rep. Charlene Fite, R-Van Buren, apparently didn’t get the memo. The usual Arkansas state Representative heading into a second term, with only nominal, non-traditional opposition in November, is supposed to be laid back, attending only a few committee meetings in Little Rock and living the easy life back home.

Not her. She is different.

Rep. Fite has rolled up her sleeves and is working on a proposal that merits the full attention of the upcoming Legislative session. It’s simply a “Good Neighbor and Good Economic bill” for Arkansas. It proposes simple twists in the state’s personal income tax that will help build and re-build coalitions of good will, good citizenship and yes, good economics for our state.

What Fite proposes is that all retirement pay for veterans and their surviving spouses be exempt from the state’s 7% state income tax rate. The cost she says may be $15 million a year, but no one for sure knows. The exemption details can be phased in, Fite says, so the tax exemption hit doesn’t come all at once.

Fite sees this bill as “an incentive” for service members to retire to Arkansas. Once here, the retirees will build a new life outside the military they have served into retirement age – a new home or two here, a new small business here and there. It’s not a real sexy tax cut, but these retirees could be a fine addition to any community in our state. The beneficiaries will no doubt contribute more to our collective communities than the exemption from the state’s oppressive income tax.

It is more than a “they gave their life in the service of our country bill,” says Fite who represents portions of Crawford and west Washington counties.

“This is a bill to give incentives to the thousands of retiring veterans to come to Arkansas, re-start their lives, build homes, start small businesses and to become a part of all of our communities from Northwest Arkansas to the Delta.”

She expects many former Arkansas residents, retiring from the military to come home to Arkansas. But she also expects our state’s quality of life, scenic vistas and safe, secure towns to lure retirees from elsewhere as well. That’s why we call this a “Good neighbor bill.” Who is a better neighbor than a retired military man or woman?

Fite, a retired public school teacher, knows that in retirement from one’s life’s work, abundant opportunities still abound. She is clearly that example. She is proudly serving in the Arkansas House of Representatives two years from retiring from the Fort Smith Public Schools. I shall say it again: I like Rep. Fite’s bill.

Similar proposals in the past have failed in the Legislature with a lack of bi-partisan support. Some of these former bills failed to reach out to a coalition of veterans in Arkansas. This bill, apparently, has both past deficiencies well in hand.

State Rep. David Meeks, chair of the Aging, Children and Youth, Legislative and Military Affairs Committee, has been an ally and supporter, and is a former veteran. They have built a bi-partisan support for this initiative. Always ready to share the spotlight, Fite also thanked Rep. Charles Armstrong, D-Little Rock, for his help with the state veterans groups. Also garnering her praise were State Sens. Jane English, R-North Little Rock, and Jim Hendren, R-Gravette. Both had in the past carried similar legislation.

Fite, at the hearing this past week, presented a resolution of support from the Arkansas Association of Counties, signed by Johnson County Judge Mike Jacobs, president of the Association. She also presented a map of the United States showing the state as the ONLY state between New Mexico and the Atlantic Ocean to not provide any tax break on personal tax income exemption to retiring veterans.

The nearest states to Arkansas that does not do something for retiring veterans on taxing retirement pay is New Mexico to the west, Nebraska to the North and Indiana and Virginia to the east.

The lack of a tax exemption treatment for military retirement pay coupled with the state’s 7% personal income tax rate makes Arkansas among the highest tax rates in the nation.
Chilling was the fact that since 2010 more than 120,000 service members have retired from the military. But during that same time period, Arkansas moved lower with fewer retired military families moving here.

There are now more than 53.2 million military retirees or survivors in the United States.

From 2010 to 2013, as Arkansas lost population among military retirees, more veteran retirement friendly states such as Alabama, Kentucky, Tennessee and Texas grew their retiree numbers. Isn’t it about time we had a low-cost way to bring “Good Neighbors” to our state?

Once here, we are sure the entire state will benefit from military retirees making their homes in Arkansas.