Subject: “Projected Economic and Fiscal Impact of Exempting Military Pension Income from South Carolina Income Tax” dated February 12, 2015
On behalf of the South Carolina Military Base Task Force, we respectfully submit for your consideration the findings of a just-completed study which is relevant to a subject that is the focus of four bills currently pending in Senate or House committees.
This study was prepared by Dr. Robert T. Carey, Director, Regional Economic Analysis Laboratory, Strom Thurmond Institute, Clemson University, in conjunction with Dr. G. Michael Mikota, Executive Director of the Santee Lynches Regional Council of Governments. Dr. Carey and Dr. Mikota used a state of the art dynamic scoring model referred to as the REMI PI+ model to account for the impact from the economic changes predicted to result from the proposed change in tax policy feeding back through tax revenue. We are extremely grateful to these respected economists and their staffs for their expertise in addressing this important subject.
The Executive Summary of the study is attached for your ease of reference. The full report is available on the Task Force website at www.scmilitarybases.com. We will be happy to provide copies to you upon request.
We believe it is fair to say that a relatively small short term investment in the elimination of state tax on military pension income will produce a return on investment to the State in at least three ways: (a) it is military friendly; (b) it will be workforce enhancing, and (c) in the long term it will be economically beneficial. We respectfully submit that this study supports those beliefs. Moreover, based on our interaction with numerous military members serving in South Carolina, we believe that the elimination of such tax will be a positive inducement to attract well qualified military retirees and their families to make South Carolina their permanent home and workplace.
Dr. Mikota and Dr. Carey have also expressed their willingness to make a PowerPoint presentation of the report’s findings and conclusions. We would welcome the opportunity to make that presentation available to whatever group or committee you deem appropriate.
Thank you for allowing us to share this information for your consideration.
Respectfully submitted, William L. Bethea, Jr. Chairman