State of Minnesota, Respondent, vs. Teon Gregory Anderson, Appellant.

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (1996).

STATE OF MINNESOTA

 IN COURT OF APPEALS

 C8-97-2118

Arnold K. Smith,

Relator,

vs.

City of Champlin,

Respondent,

Commissioner of Veterans Affairs,

Respondent.

 Filed July 21, 1998

 Affirmed

Forsberg, Judge *

*Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. Art. VI, § 10.

Department of Veterans Affairs

Patrick J. Kelly, Stephen C. Kelly, Bannigan & Kelly, P.A., 1750 North Central Life Tower, 445 Minnesota Street, St. Paul, MN 55101-2132 (for relator)

Carla J. Heyl, League of Minnesota Cities, 145 University Avenue West, St. Paul, MN 55103-1044 (for respondent City of Champlin)

Hubert H. Humphrey III, Attorney General, 102 State Capitol, St. Paul, MN 55155 (for respondent Commissioner of Veterans Affairs)

Considered and decided by Klaphake, Presiding Judge, Forsberg, Judge, and Holtan, Judge.**

**Retired judge of the district court, serving as judge on the Minnesota Court of Appeals by appointment pursuant to Minn. Const. Art. VI, § 10.

 U N P U B L I S H E D O P I N I O N

 FORSBERG, Judge

Relator Arnold Smith appeals from an administrative decision by the Commissioner of Veterans Affairs dismissing his claims under the Veteran's Preference Act. Because relator's positions were eliminated due to good-faith budget cutbacks by respondent City of Champlin, his demotion to another position did not violate the act. We affirm the commissioner's decision.

 D E C I S I O N

We review de novo relator's claim that the commissioner misapplied the law. See Gorecki v. Ramsey County, 437 N.W.2d 646, 649 (Minn. 1989) (question of law fully reviewable by appellate court). No veteran employed by a political subdivision:

shall be removed from such position or employment except for incompetenc[e] or misconduct shown after a hearing, upon due notice, upon stated charges, in writing.

Minn. Stat. § 197.46 (1996). Nevertheless, an employer may terminate a veteran's public employment if the veteran's position is abolished as part of a good-faith cost-cutting measure. Young v. City of Duluth, 386 N.W.2d 732, 738-39 (Minn. 1986).

Relator does not challenge the commissioner's finding that the city acted in good faith when it abolished his positions as part of its budget cutbacks. Instead, relator argues that the good-faith exception does not apply because he was demoted, not removed. Demotion can violate the statute when it is the functional equivalent of removal from a job. See Gorecki, 437 N.W.2d at 650 (holding that reclassification of veterans' jobs was not functional equivalent of removal). Here, however, there is no question that relator's previous positions were eliminated and those acts of removal were protected by the good-faith exception. While relator describes the result of the city's actions as a demotion, demotion analysis does not apply because the city's act of retaining relator as an employee was "not the functional equivalent of removal." See id. (where no good-faith elimination of previous classification, court analyzed job duties and responsibilities to determine if reclassification were functional equivalent of removal). The fact that the city was able to place relator in another position when it was forced to eliminate his previous positions is not actionable under the statute. To hold otherwise would encourage public employers to dismiss veterans from employment instead of encouraging employers to retain veterans as employees. Such a result would be contrary to the purpose of the Veteran's Preference Act. See Boyd v. Matson, 155 Minn. 137, 140, 193 N.W. 30, 31 (1923) (act is to encourage public employment of veterans).

 Affirmed.