Just as the U.S. Armed Forces defend the nation, state governments are learning that improved laws and policies enhancing the lives of military families guard their own economic futures.
Leticia Van de Putte, a Texas state senator from San Antonio, can hardly stop listing the reasons why state governments should make military family policies a high priority.
“The military provides local communities and states with a strong and stable work force,” she said. “Military members make good citizens, so local communities and states should want to enhance their quality of life.”
Van de Putte, who has carried pro-military-family legislation into Texas law, listed several factors that pull states toward favorable policies, such as wider eligibility for unemployment insurance benefits for spouses, protections from predatory lenders, generous instate tuition policies for higher education and easier avenues for voting.
“With the last base-closing round [in 2005], the Pentagon ranked quality of life very highly [during the process], much higher than in prior rounds,” she said. “The Department of Defense (DOD) was emphatic about quality of life. Better policies can be a framework that can act as an inoculation against base closings, but states have to work at it.”
States that military families enjoy are states where military personnel end up retiring. Van de Putte said retired military officers are valuable to communities and states because they take leadership roles at non-profit organizations, churches and schools.
“Former enlisted personnel also provide a great work force,” Van de Putte said. “Everyone should be interested in having military retire in their states.”
The Beginning of an ERA
The defense contracting industry prefers states that support military families because that could ensure more contracts.
“It’s an economic development issue for states as well,” she said.
The Pentagon and its quality-of-life contractors employ a tested method for encouraging state governments to approve or amend laws that can make life easier for military families. The process is called ERA, standing for “education,” “relationship” and “assistance.”
The “education” and “relationship” occurs when DOD officials attend state legislative conferences around the country, usually hosted by governors and lieutenant governors. Those top elected officials increasingly are appointing staff members who specialize in military affairs.
Discussions about difficulties faced by military families ensue at the conferences. When lawmakers are ready to sponsor legislation, the Pentagon provides “assistance” in the form of supportive information and the best practices in other states.
ERA usually takes years before policies and laws change in a state, but sometimes the method can produce results within a year.
A primary difficulty that arises constantly concerns unemployment insurance for spouses when the military member is ordered to another state.
When working spouses give notice for their jobs because of the relocation, state laws traditionally consider the job loss “voluntary,” when in fact the spouse has no choice. That means spouses lose their eligibility for unemployment insurance in the state they are leaving, and they certainly do not qualify for jobless benefits in their new state because unemployment checks are paid by taxes on employers.
States have been reluctant to change the law to allow unemployment benefit because the employer would have to pay higher taxes to make up for benefit payments for their own lost employees.
“Businesses know that in the time of war, military members are more mobile,” Van de Putte said. “They might think twice about hiring a spouse of a military member if they thought they might pay higher unemployment tax rates after losing an employee. We felt employers were penalized unduly for hiring military family members.”
Therefore, in 2005, Van de Putte sponsored a bill that changed Texas law. “It makes unemployment available,” she said. “It makes sure Texas businesses are not dinged with a charge-back [when military spouses leave with their deployed or transferred military member.] This helps families and businesses.”
Without unemployment insurance benefits, military families lose income at a time when financial resources are drained by the relocation. The unemployment insurance checks also give the spouses more time to find a job in their career field and in the same pay range rather than settling for first low-paying job they otherwise may need just to survive financially.
Sometimes, a spouse needs time to acquire licensing or credentials to pursue their careers in new states, and unemployment insurance can help bridge that waiting period.
Florida approved a similar bill in 2004.
“Florida has one of the nation’s highest populations of Active Duty and Reserve military, and this new law will be a significant financial assist for military families,” said Susan Pareigis, director of Florida’s Agency for Workforce Innovation, at the time of enactment.
So far, 14 states in all allow unemployment insurance eligibility in these instances. Eight states do not. The remaining 28 states follow policies that consider unemployment benefit applications on a case-by-case basis, by using a waiting list or after a period of ineligibility.
One factor that helped convince the 14 states into changing their laws is the tendency of military spouses to draw unemployment benefits for shorter periods of time than non-military workers who leave jobs.
Outlook Improves For Tuition
Expanded eligibility for instate higher education tuition is an issue where the Pentagon has made substantial progress with state governments.
When service members change residences, they lose their right to instate tuition after they and their children already have begun their college educations.
Out-of-state tuitions can range up to four times higher than instate tuitions, putting a heavy financial burden on military families that are trying to improve their educational standing.
So far, nearly 30 states have found ways to encourage their state-assisted universities and community college systems to forego charging out-of-state tuition for students when their military parents are transferred out of state or deployed overseas. The students can maintain instate tuition rates as long as they are enrolled. If the military personnel themselves are attending a university or college, they can resume instate tuition rates if they later return to that state.
Nine states improved their laws during the past two years — Colorado, Illinois, California, Kansas, Maryland, New Mexico, North Carolina, Virginia and Massachusetts.
“Family members and service members always got instate tuition anyway,” said Alva Anthony, an education services officer serving the 43rd Airlift Wing in North Carolina, when that state changed its law. “This is really a great victory for us.”
Now, if military students decide to go to a state school, they’ll be able to reap the benefits of being a state-status person if their military parent is assigned elsewhere, Anthony said.
Texas went one step further by expanding the eligibility of its Texas B-On-Time college loan program to graduates of overseas military high schools, whose parents are on active duty. The $30 million loan program forgives student loans for Texas high school graduates who receive a four-year degree in four years or less and if they maintain a “B” grade average.
“There is a cost associated with this,” Texas’ Van de Putte said. “But we felt schools could forego the higher out-of-state tuition rates. We eased that by making it clear to the universities and community colleges.”
Predatory Lending
The Pentagon is highly concerned about the financial well being of its lower-paid and youngest members, the enlisted ranks, especially when it comes to falling victim to predatory lenders.
Therefore, so-called “payday lending” has become a hot issue nationally wherever military installations are located. Twenty-eight states have no laws offering meaningful consumer protections to service personnel, and only seven offer partial protections and limitations to prevent military personnel from falling into heavy debt.
Even in the 15 states that have passed laws to limit loan interest rates and restrict multiple loans, the lending industry has pushed back with legislative efforts to repeal the restrictions and limits. The Pentagon has been able, in the case of North Carolina and Pennsylvania, to stop attempts at repealing protective laws.
The latest states to take positive steps are Georgia, Oklahoma, Nevada, Texas and Washington, but Pentagon officials believe they have a long way to go on this issue.
Although high-interest lenders say military personnel represent only a small percentage of their loans, they tend to cluster offices around military installations.
“These are predatory and aggressive financial outlets that prey on military families,” Van de Putte said.
Texas state Sen. Eliot Shapleigh of El Paso saw the problems that resulted from the groups of lenders that operated offices near Fort Bliss, so he sponsored a 2005 bill with protections that became law.
The state law prohibits high-interest lenders from garnishing a service member’s salary to collect payment. It outlaws the firms from contacting commanding officers of borrowers in collection attempts and to try to collect debts from a service member’s spouse if the military borrower is deployed.
Lenders also must disclose these regulations at the time of loans and if a military installation’s commanding officer decides certain lenders are off limits, those lenders must not lend money to soldiers from that base.
Shapleigh and Van de Putte know young people in the enlisted ranks are vulnerable and do not understand the financial holes they can dig themselves into in a short time.
“I believe companies that would prey on soldiers are abhorrent,” Shapleigh said when his proposal was enacted. “What we’re trying to do is have soldiers make informed decisions and protect them from abuse.”
Van de Putte added that some of the larger institutional lenders voluntarily are following a more professional code of conduct when it comes to military personnel lending, but smaller firms use capital from out-of-state banks for loans to escape state lending limits so they can charge outrageous higher rates.
“We also are working to make sure reputable credit unions and banks open offices on base to offer financial literacy and counseling,” Van de Putte said.
The Pentagon became more serious about stopping payday lending practices after a major report from the RAND Corp. detailed the problem’s severity in 2000.
Among the findings, 24 percent of enlisted personnel had no savings and 43 percent had less than $1,000 in a bank account. The report also said 27 percent of enlisted service members had difficulty paying bills, compared with 19 percent for comparable civilians.
The Pentagon followed up with its Financial Readiness Campaign to educate personnel about financial dangers. The campaign started in 2003 after being joined by numerous private sector financial organizations as partners, including the Better Business Bureau, the Consumer Federation of America and the Federal Deposit Insurance Corp.
High-Tech Voting
Along with defending the country, military families carry out another vital role for the United States — voting. That can be difficult though when they often changes states and counties of residences.
“Each county has its process for requesting absentee ballots,” Van de Putte said.
The DOD wants states and local governments to provide more ballot information sooner before elections and to use expedited postal and courier systems.
Texas does not yet have a system up to the Pentagon’s request, but a pilot project is under discussion that could revolutionize military remote voting.
“Bexar County has the largest number of requests for absentee ballots for deployed military,” Van de Putte said. “We are working with the Texas secretary of state and the Bexar County elections administrator so that requests for ballots do not have be written and mailed in but can be also faxed or e-mailed in.”
Under the proposed pilot project, an electronic ballot could be e-mailed to military personnel, secured by a military code, which then could be printed, marked and mailed to the appropriate office.
“This could serve as a model outside across the country,” Van de Putte said, explaining that the improvements and the pilot project will be proposed for the 2007 session of the Texas Legislature.
Beyond these issues, some states offer benefits to military families not on the Pentagon’s priority list. Several states offer free or honorary hunting and fishing licenses. Georgia requires the military personnel and their families be exempted from jury duty. Texas and Georgia are among states that allow military families living off installations to break rental leases without penalties.
Military-heavy states Texas, Georgia, California and Virginia have signed agreements to ease educational transcripts and records help families coping with different accountability tests so that such tests do not have to be repeated unnecessarily, Van de Putte said.
Indeed, states now falling into the habit of exchanging information on what military family-friendly laws work the best because more states understand the economic benefits that result.
“We try to make it easy for military families,” Van de Putte said. “We try to make things as helpful as possible.”
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