Expanded pension tax credits are good for Maryland

I fully support Gov. Wes Moore’s proposal to grant a tax exemption to the first $40,000 of retirement income for military retirees (“Should Maryland give a $50M bonus to military retirees?” Feb 17). Keeping retired military members in the state will not only be offset by their spending their retirement income here, but most retirees seek out post-retirement employment, generally in the same state that they live in. I see no downside to the governor’s proposal.

Those who choose the military as their career live structured lives and are productive members of our community. These are the folks that we see supporting their children, supporting the schools, maintaining their homes and neighborhoods, etc. Overall, they demand fewer services from government, have more to offer to their communities and are generally the types of people we want to live in our communities. There are so many benefits that can’t be counted by the economists if they simply look at the taxes received through their retirement income. These people buy homes, groceries, vehicles, entertainment and various other commodities that keep the money flowing throughout the state. They are good for Maryland.

In 2017, Gov. Larry Hogan was able to convince the General Assembly to provide a $15,000 exemption to first responder retirees who were between ages 55 and

65. This program appears to be working to keep the younger retirees here in the state during those years, but there is no incentive for them to stay beyond age 65. Many retirees are still taking their pension and retirement moneys, as well as any investment funds and funds received through property sales with them as they move to more tax-friendly states. There is no real incentive to stay here, especially since they have no real way to increase their incomes as they continue to age.

Perhaps Maryland could include those first responder retirees with this proposal by increasing their exemption to the same amount being offered to military retirees. One thing that is currently missing is a component to keep up with inflation. In 2023, that $15,000 exemption provided in 2017 doesn’t go nearly as far this year as it did back then.