With the military downsizing after years of war in Iraq and Afghanistan, a surge of military retirees is anticipated to start searches for new homes in the next two years.
South Carolina has historically boasted much success in attracting these much sought-after military retirees thanks to our mild climate, high quality of life and low cost of living. And as much as these veterans enjoy South Carolina, we enjoy having them here even more thanks in part to the mighty economic punch they pack. The state's current 58,000 military retirees -- half of whom live around the state's four military communities in Beaufort, Charleston, Columbia and Sumter -- pump more than $442 million annually into the four communities.
Additionally, many of the retirees, who are often in their 30s and 40s, possess skill sets that speak to South Carolina's goal of becoming a 21st century manufacturing hot spot.
But this long-standing win-win arrangement may be waning. Other Southeastern states are increasing their efforts to attract these retirees. South Carolina recently dropped from eighth to ninth in states with the most military retirees, overtaken by Alabama.
One tool that other states are making use of is exempting military retirement pay from state income tax.
To compete, S.C. lawmakers are considering following suit. A bill to do so unanimously passed the House last session but arrived too late in the Senate for debate and a vote.
If the bill is reintroduced (and it is expected to be), we anticipate sparks to fly. That's because the tax generates a whopping $22 million per year for the state.
The General Assembly should give serious thought to the exemption in the upcoming session that begins in January. Discussions must center on whether the state can offset the revenue loss by growing its number of military retirees who would pay sales tax as well as income tax on any second jobs. This will be especially important as lawmakers attempt to also find money to repair the state's roads and bridges and to also follow a new landmark ruling by the S.C. Supreme Court to provide an improved education for students in poor, rural school districts.
If indeed the tax revenue can be offset, it deserves passage. A task force that favors the exemption plans to provide legislators with a "dynamic analysis" that will show it's possible, according to The State newspaper. We look forward to seeing it.
Additionally, we urge lawmakers to consider less expensive changes to help attract military retirees, including giving in-state tuition rates to military personnel and their children. The state has already passed several other initiatives that will not only help attract retirees but shore up the state against future rounds of base closures, including allowing veterans' courts to lower property tax assessments for deployed military personnel.
And some of the state's communities are working on their own to retain vets -- and deserve continued state support. For example, the Transitional Workforce Education Assistance Collaboration, or TWEAC, is an effort by the city of Beaufort and the Lowcountry Economic Alliance that has had success in helping those leaving the military from Beaufort County's three bases to fill out resumes, acquire interview skills and land local jobs that fit with their military skills.
Working to keep military retirees in South Carolina isn't just a sign of patriotism. It's also a sign of smart planning for the state's future. Here's hoping it gets the legislative attention it deserves in 2014.