Senate passes partial exemption for military retirement pay after floor debate

The Oregon State Senate passed Senate Bill 225 A on third reading on Tuesday, approving a measure that exempts the first $17,500 of military retirement pay from state taxable income.

The bill’s sponsor, Senator Cedric Manning Jr., pressed the bill as a targeted benefit for career service members. “This bill exempts a small portion — $17,500 — of military armed forces retirement pay,” Manning said, describing the change as intended to encourage veterans to come to and remain in Oregon.

Supporters said the exemption would help attract retirees and recognize long service. “These people put their life on the line,” Senator Kim Thatcher said in support, and Senator David Brock Smith described local veterans who have told him the tax difference affected their moving decisions.

Opponents urged caution about the state’s revenue base. Senator Tim Golden, who said he admires veterans’ service, urged that tax reductions be paired with offsets, saying, “Let’s pay for this. If we chip away at our tax code now, we are doing a serious disservice to those who succeed us in this chamber.” Golden said repeated one-off exemptions risk long-term fiscal strain as revenues fluctuate.

Senators who spoke in favor emphasized workforce, community and recruitment benefits. Senator Karin Solman noted many states already exempt military pensions and framed this as joining a larger national trend that helps attract skilled, civic-minded retirees.

After debate the Senate adopted the bill on final passage; the roll call recorded a constitutional majority in favor and one recorded no vote by Senator Golden. The chamber’s clerk announced, “Senate Bill 225 A having received a constitutional majority is declared passed.”

The measure now moves to the House for consideration. The floor debate centered on the balance between honoring service members and preserving long-term revenue for state services.