January 4, 2008

Honorable Steve Beshear

Governor, State of Kentucky

700 Capitol Avenue

Frankfort, KY 40601

Dear Governor Beshear:

We encourage you to include state income tax exemption for active duty military who claim Kentucky as their permanent residence in your 2008-2009 budget.  It is our understanding that there are approximately 25,000 active duty military who claim Kentucky as their home of record.  We believe there are multiple reasons to exempt active duty military from Kentucky’s state income tax, including:

Ø      It’s the right thing to do.  Kentucky’s military families deserve a financial break as they continue to sacrifice on our behalf each and every day. Exempting their pay from income tax is a quick and effective way of showing our appreciation for their continued sacrifice.

Ø      It’s the smart thing to do.  Providing income tax exemption for active duty military will help persuade Fort Campbell families to choose Kentucky as home.  Currently, only 21 percent of Fort Campbell military families that live off-post choose to live in Kentucky.  Our goal is to increase that to 30 percent by 2012. 

Ø      It’s the wise thing to do.  Military families are more likely to retire to a place where they’ve already lived or called home.  When we recruit active duty to live in Kentucky, then we can recruit them to retire to Kentucky.  As a result, they help make our communities and state stronger.

The impact of this legislation is clear.  It:

Ø      Conveys our appreciation for the sacrifice of our military families

Ø      Demonstrates a commitment to support our military families and our military installations

Ø      Increases Kentucky’s population as more families live and claim Kentucky as home

Ø      Increases Kentucky’s sales and property tax revenue as more families live and shop in Kentucky

Ø      Increases the number of military who choose to retire to Kentucky

Ø      Increases the number of highly skilled professionals in the civilian workforce (spouses, veterans, retirees, etc)

Ø      Increases Kentucky’s ability to recruit military-related industry

We recognize the tremendous opportunity Kentucky will have if we encourage more military to choose Kentucky as home.  Further, we know that more military families at Fort Campbell are turning left to Kentucky and they are finding a great state with great people.  Again, we ask you to include state income tax exemption for active duty military in your 2008-2009 budget. 

Sincerely,

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