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Don't reduce combat veterans' tax credit

Portsmouth Herald - 2/21/2017

The Portsmouth City Council on Tuesday night will vote to reconsider its earlier vote to expand the $500 tax credit to all honorably discharged veterans, not just those who served in an armed conflict.

The council in late January voted 5-4 to adopt the “all veterans’ tax credit,” after a long debate on the issue. There may not have been enough debate on this however.

Councilor Eric Spear will ask the council to reconsider its vote, and if it does so, that would allow debate on Spear’s idea to decrease the tax credit for veterans who served in armed conflict from $500 to $250 to offset the general tax impact of the expanded veterans exemption. The move would also reduce the credit from $500 to $250 for non-combat veterans, who, as of now, would receive the full credit.

It is inappropriate to cut in half a tax credit that many veterans in the city have come to rely upon and some for as long as it has existed. The idea of taking $250 away from combat veterans to offset the general tax impact of extending the exemption to all veterans makes no sense.

If the City Council wants to provide the veterans tax exemption to all veterans it should be willing to stand behind the tax impact that would be shifted to the general populace. A 5-4 vote would suggest there isn’t concrete support for the extension, however.

It would appear the council could have used some more time to fully understand the implications of extending the tax exemption to all veterans. City Assessor Rosann Maurice-Lentz estimated the expansion of the tax credit could cost as much as $450,000 while City Councilor Josh Denton said the number was likely closer to $235,000. City Manager John Bohenko, who is on medical leave, has said expanding the credit to all veterans could result in a 10-cent increase to the city’s tax rate.

Perhaps the council could have waited on a decision until the cost was more clearly known. Then the councilors could have debated whether expansion of the credit was something that could be done without causing too much of a burden on other residents. It would be good to hear the mood of the city’s residents overall as well.

Providing a financial nod to veterans is a noble thing to do and, on the surface, even as much as $450,000 doesn’t seem like a huge impact in a city with a budget north of $100 million. However, the problem of shifting tax burdens, even from veterans who served our country, is that it adds expense across the general public and some residents who are being asked to help a broader range of veterans do not have enough money to support themselves.

That is why a longer debate, with accurate costs, could have better served the council in making this decision. However, it should be abundantly clear that taking $250 away from veterans who have received the full $500 credit in order to expand the credit to all veterans is a terrible idea, frankly.

If the City Council does not feel it is appropriate to ask the general populace to pick up some slack in order to honor non-combat veterans, it should rescind the expansion.