A bill passed by the Maine Legislature which would have provided a tax exemption for over 51,000 civil service retirees including teachers, municipal, state, federal and military retirees was vetoed by Governor Angus King.

The $10.5 million cost of the exemption would have been offset by taxing Social Security benefits identical to federal income tax laws. About 26,000 filers of the 242,000 individuals that receive Social Security benefits in Maine would have been affected.

In his veto message, King said that he could not justify the imposition of the supporting tax burden squarely on the shoulders of other Maine retirees. "This new tax would serve as a disincentive for many retirees to remain in, or return to, Maine's workforce," he said.

The Maine Association of Retirees, sponsors of the bill, say that the Association is now working with the Legislature's taxation committee on a new bill for the 2000 session.