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May 28, 2009 (San Diego's East County)--“I spent 26 years serving my country in the US Navy, and I would do it again,” said Arthur Armagost, an Alpine resident and veteran. “But it pains me to see men and women I served with leaving California when they retire. They spent their entire careers stationed in California but can’t afford to live here anymore.”

State Assemblyman Joel Anderson (R-El Cajon) agrees with Armagost and is leading an effort to make California friendly to veterans and military retirees.

Assembly Bill 1077 (Anderson) would exclude military retirement benefits and survivor annuities from state income tax.

“Men and women in the armed forces make very practical sacrifices on a daily basis, in service to our country,” said Anderson. “We reward them with a modest retirement pay. It’s just wrong to turn around and tax the small compensation for a lifetime of service. They’ve already paid more than their fair share.”

Anderson has drawn criticism from Democrats for refusing to raise taxes and supporting various tax cuts at a time when California faces a massive budget deficit and the Governor is proposal deep cuts in education and vital public services.

But Anderson responds that he believes tax relief for veterans would likely increase revenue over the long run.

Seventeen other states currently do not tax military retirement benefits, including neighboring states of Oregon and Nevada. If California were to join their ranks, it would likely lead to an increase in military retirees relocating to the Golden State, Anderson noted.

“The state would generate other revenue from these individuals, including sales tax, property tax and gas tax,” he explained. “It would be beneficial to the state economy and more than offset the lost revenue. But most importantly, it’s the right thing to do.”

Full text of the bill:

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