Tax cut for military retirees advanced by Nebraska lawmakers

LINCOLN, Neb. (AP) — Military retirees in Nebraska are one step closer to getting a full tax exemption on their retirement pay under a bill that won initial approval from lawmakers on Wednesday.

Lawmakers advanced the measure, 45-0, through the first of three required votes. The measure is one of Gov. Pete Ricketts’ top priorities this year.

Supporters said the tax exemption will help Nebraska because it encourages highly trained, career military members to stay in the state instead of moving to neighboring Iowa, which doesn’t tax their retirement pay.

Many military retirees use their experience and security clearances to get other, higher-paying jobs after they leave the service, and the income from those non-military jobs is taxable. Sen. Tom Brewer, of Gordon, said he sponsored the measure because those retirees still contribute a lot to the state economy.

Some critics said the bill would divert money away from large priorities, such as lowering property taxes. Sen. Curt Friesen, of Henderson, said he was concerned the bill would make it harder to pass any sweeping measures.