John Cefali: H5395 A Well-Earned Retiree Exemption


I have noticed that House Finance Representatives Azzinaro, Kennedy, Vella-Wilkinson, Tobon, and McLaughlin proposed H-5395 in February 2019, which , if passed and approved without conditions, would exempt from taxation the first $25,000 of military retired pay of veterans such as myself who are over 60 years of age.  I applaud their proposal and thoughtfulness of veterans.

The first effort I am aware of whereby a proposed House Bill was introduced to exempt military retiree pay from RI state taxes was in 2006 by Senator Walter S. Felag Jr., whom I also applaud.  Others in the RI legislature have submitted variations of this proposal over several years, and I also applaud them.  On each occasion every proposed bill regarding exempting military retiree pay from RI state taxes has been recommended by the committee “for further study,” thereby entering and continuing to languish in “study” purgatory.  A proposal that benefits veterans with compensation we earned and is well-deserved that must be “studied” for more than a decade is frustrating.

There are only eight (8) states that tax military retirement pension without any form of special considerations, and Rhode Island is one.  Thirteen (13) states provide special provisions or other considerations; twenty (20) states do not tax military retirement income (including Massachusetts); and nine (9) do not tax military retirement income as those states have no income tax requirement.  With many agencies devoted to monitoring and ranking states on an annual basis in a multitude of categories, I have researched at least a dozen of them and have found the following few of particular interest with respect to Rhode Island for military retirees…for 2019:

  • ranks RI 34th best (or the 17th worst) out of 50 states and the District of Columbia for military retirees.
  • ranks RI 51st best (or the #1 worst state) out 50 states and the District of Columbia for military retirees.
  • ranks RI 43rd best (or 8th worst) out of 50 states and the District of Columbia for military retirees.
  • GI Jobs ranks RI 44th best (or 7th worst) out of 50 states and the District of Columbia for military retirees.

As I researched the best and worst states to retire in, in general, Rhode Island rankings are even more grim.  As I approach the age of 65 later this year, on the threshold of ultimate retirement, I would be extremely disappointed if this proposed bill, as with other similar proposals in past years, continues to languish in a status of “further study” for another year as it has for over a decade.

The best gift of gratitude RI can give its veterans is to let us “keep” what we earned and deserve as Massachusetts and a multitude of other states provide — over the age of 60 and to all veterans in general regardless of age.  The kind consideration of the House passing this Bill effective on 1 January 2020 would be a good start and would be appreciated by those of us who deserve such consideration.


John Cefali is a retired master sergeant with the United States Air Force.

  • Makaha Ken

    Living retired in Honolulu, Hawaii not in the 65 sq mi that makes up “Core Metro Honolulu” where  unlimited sky high prices and cost of living will give you nose bleeds, I find It is approximately $15,500 per year cheaper living here than back in Rhode Island. Vast majority of savings is due to extremely  lower or no taxes, cost of insurances, cost of owning and operating motor vehicles and healthcare in Hawaii versus Rhode Island.

    Case in point; State of Hawaii exempts the following retirement pensions from state income tax Social Security, federal, state, municipal, military and some private pensions. All out-of-state government pensions are exempt. Also, employer-funded pension plans are exempt. Distributions from private employer pension plans received upon retirement are partially taxed by the state if employee contributed to the pension plan.

    City and County of Honolulu property tax is $3.50/$1,000 @ 100% assessed value. Minimum property tax is $300/year. Owner occupied exemption is a flat $100,000 and senior exemption is $140,000. You are taxed on remaining property value after subtracting exemption and if resulting tax is below minimum you must at least pay minimum property tax per year.

    State of Hawaii and four County Municipalities do not property tax vehicles and boats. There is no municipal school tax as Hawaii has one unified school district operated and financed by state government. State sales tax is 4% on all transactions except perscription drugs.

    Median 365-day temperature is 78F degrees so no winter heating bills and no spring, fall or winter wardrobes only summer clothing is required.

    All uniform military commands have major bases in Honolulu with full on base services plus commands rings the Island with major R&R/MWR deluxe resorts and facilities at discounted military prices. Most all private businesses and facilities provide military discounts to all military families when they show valid identification active or retired. Joint Base Pearl Harbor-Hickam has a MAC terminal.

    • ShannonEntropy

      What Ken describes is a common system known in the U.K. as
      The Postcode Lottery

      Ken has figured out what you should, Engaged Citizen:

      If you donut like The Way & The Rules we have here
      … move somewhere better

      I was on a blog recently where some Canadian guy was complaining about how he needed a cancer drug that cost out-of-pocket $100K a yr in Ontario… but it was *FREE* in Alberta

      My response: So move to Alberta

      Duh !!

      • Makaha Ken

        Fully agree with you! 

        Unfortunately most all the comparisons used take the cost of living from the state capitol city. In this case Honolulu 65 sq mi “Core Metro Honolulu” which is the highest priced area to live in out of 11,000 sq mi state of Hawaii. So when you see the comparisons rank Hawaii as a high cost of living state, they are only looking at numbers and most likely never visited here. BTW, Hawaii is about 10 times larger than Rhode Island and all of our land-line telephone calls to lower 48 states are unlimited and free of toll charges. We also have pay telephone booths still on the streets with telephone books.

        According to U.S.Census Bureau over 600 expat Rhode Islanders and climbing live in Honolulu about (70% sq mi size of total RI landmass) which has a population of about 900,000 out of 1.4 million state-wide population. For military retirees about 10% population is military not including federal, state and municipal retirees that have moved here for retirement tax benefits. One fourth of Hawaii income is created from tourism 10 million annually spending $17.9 billion. In perspective state fiscal budget is only $14.4 billion based on collected resident taxes balanced break even by state constitutional law. 

        When you retire your area of daily travels encompasses about 30 sq mi circle. Honolulu (Island of Oahu) is 599 sq mi so “island fever” does not apply. Honolulu tourist district (Waikiki Beach) can be best discribed as a mix of New York City combined with Las Vegas and Miami, Florida South Beach open and partying 24/7 with happy hour prices 24 hour a day with ranked 7th best luxury shopping in the world.  Gambling is illegal in Hawaii and it’s waters but Las Vegas is considered the 9th Hawaiian Island due to all people from Hawaii living there and daily discounted all inclusive flight packages offered to Hawaii residents by casinos.

        If you live on any other island and need a medical specialist you will have to fly to Honolulu where most of them are located. The very best hospitals in Hawaii are located in Honolulu. There is also a national cancer research center in Honolulu. The Honolulu public transit system (Thebus) has been nationally voted best in nation twice.

        Living in Hawaii you make sure to have airline frequent flyer mile accounts and credit cards plus hotel credit cards that provide free flight miles or upgrade seats and free resort or hotel room nights. It is a 5 hour flight Hawaii to California or 11 hours to East Coast (frequent flyer miles build quickly). There are a lot of Hawaii stores you end up shopping in that give free frequent flyer miles on local airlines so you can hop island to island for free and stay in hotels for free doing stay-vacations. You just need to learn the system of living in Hawaii which is tottally different than living on the mainland. 

        If you like beaches, Hawaii has 750 actually measured miles and growing compaired to RI so called 400 exaggerated miles but Hawaii beaches have been nationally ranked “best beaches” by “Dr Beach” annually and are free access with free parking, free lifeguards, free showers and bathhouses, attached free parks, free picnic tables with BBQs and free grounds keeping and trash pickup. In Hawaii nobody can own the seashore, beaches and restrict public access including federal government.