"UNEMPLOYABILITY" - How did it pop up as a disqualification for Colorado's Disabled Property Tax Exemption?

Back in 2006 Colorado voters amended our constitution to provide a partial property tax exemption (a small one, about $480 on average) for totally disabled military veterans. This is now Article X Section 3.5 of the constitution and §39-3-202(2) C.R.S of our statutes. The 2006 Blue Book explained that federal VA ratings would be the standard followed for veterans to qualify. 

The VA has only two such ratings. 

One is for injuries that are so severe the veteran is made 100% disabled. The other is for injuries that are severe but even worse than the percentage of disability VA rules allow for that particular injury or illness, and which by themselves (only military issues) make the veteran unable to work for the remainder of his/her lifetime...that rating is termed IN THE LAW as, "Total Disability Individual Unemployability" (TDIU.) BOTH of these VA ratings are for ONE HUNDRED PERCENT PERMANENT AND TOTAL DISABILITY. 

Colorado has a problem in that for some reason outside the law, the state opted to refuse the exemption to veterans having the VA TDIU rating.  Although state agencies refuse to accept TDIU or unemployability, that refusal isn't in the constitution, the legislation or the 2006 Referendum E, for which the Blue Book specifically referenced totally disabled veterans unable to work for their remaining lifetime.

It seems the only mention of unemployability is in the instructions and web pages saying it is unacceptable...only in the forms for the final implementation of the referendum, the constitutional amendment, and the legislation does unemployability get mentioned as a disqualifier. Unemployability, one of the two VA ratings for total and permanent military service disability is simply (and wrongly) excluded.

That's wrong. It needs correction, and we call on DMVA and DOLA to make implementation of this constitutional benefit properly reflect the constitution. VA's rating of veterans should be respected as detailed in the law. ALL veterans rated totally and permanently disabled, including via the TDIU rating, should be afforded this modest property tax exemption.

Here's what the law says are our totally disabled veterans entitled to the partial tax exemption:

Colorado 39-3-202 C.R.S.

 “(3.5) ‘Qualifying disabled veteran’ means an individual who has served on active duty in the United States armed forces, including a member of the Colorado National Guard who has been ordered into the active military service of the United States, has been separated therefrom under honorable conditions, and has established a service-connected disability that has been rated by the federal department of veterans affairs as one hundred percent permanent disability through disability retirement benefits pursuant to a law or regulation administered by the department, the United States departments of homeland security, Army, Navy, or Air Force.”

COLORADO DEPARTMENT OF MILITARY & VETERAN AFFAIRS

Property Tax: Disabled Veteran Property Tax Exemption

This program is for Disabled Veterans who:

• Are RATED by the U.S. Department of Veterans Affairs at 100%, Permanently and Totally Disabled by the U.S. Department of Veterans Affairs (Individual Unacceptability(?*) does not qualify) AND

• You must have owned and occupied the property since January 1st of the year in which the Veteran is applying. (*unacceptability is DMVA's typo, not mine!)

COLORADO DEPARTMENT OF THE TREASURY

“Requirements for Eligibility, Veterans

• Applicant must be a disabled veteran who has been rated by the U.S. Department of Veterans Affairs as permanently disabled. (VA unemployability awards do not meet the requirement for determining an applicant's eligibility.)”

COLORADO DEPARTMENT OF LOCAL AFFAIRS

ELIGIBILITY REQUIREMENTS, Qualifying Disabled Veteran:

To qualify, a disabled veteran must meet each of the following requirements: 

• Served active duty in U.S. armed forces.

•  Was honorably discharged.

• Sustained a service-connected disability rated by the U.S. Department of Veterans Affairs as 100% permanent and total.  Disabilities rated less than 100% and VA employability awards do not meet the eligibility requirements.

BUT WAIT: THERE'S MORE!
There's another problem with the way Colorado implements this constitutional benefit and its enabling legislation. They simply haven't gotten around to it.

The constitution also recognized servicemembers that the military retires as totally and permanently disabled. Through an oversight, these disabled veterans were simply not mentioned in the statutes and were therefore refused the exemption even though it was a constitutional right, spelled out crystal clear, word for word:

"...through disability retirement benefits pursuant to a law or regulation administered by the department, the United States departments of homeland security, or the departments of Army, Navy, or Air Force.”

In May 2015 the governor signed an act unanimously approved by both houses of the legislature in May 2016 to correct the problem by placing those last fifteen words in the constitution also in the law. For some reason the correction hasn't been implemented by the responsible state agencies...it has simply been ignored. Totally disabled military retirees continue to be taxed and the constitution abused. 

When I've tried to discuss this disconnect with officials there's been no disagreement about the issue, but it doesn't seem a big deal to anyone.

This is a big deal! The people of the state are the supreme power, and the constitution reflects the will of the people, with state officials from the governor on down sworn to protect and defend it. A right specifically guaranteed by our state constitution cannot simply be ignored by agencies that didn't get around to honoring it. You may recall that in 1776 unfair taxation led to some disagreement between England and her American colonies. 

Thankfully, officials have indicated that things will be set right by January 2018, ending eleven years of unconstitutional taxation of this group of totally disabled military retirees. By January, these veterans will have been unconstitutionally overtaxed about $4,800 each.

DISCOVERED – A 2010 DOLA Reference to "Unemployability"

DOLA brochure           

Days and days have been spent trying to pin down how the state's basis for its current barrier to VA permanent and total disabled unemployability (TDIU) ratings and just how it grew into policy. Perhaps one such source document was found this evening, published in 2010 by the Department of Legislative Analysis (DOLA.) But nothing so far any earlier than 2010.

We learned that the 2006 Referendum E voter summary specifically described unemployability issues for the electorate to approve in this constitutional amendment. ("Veterans are rated 100-percent permanently disabled when a mental or physical injury makes it impossible for the average person to hold a job and the disability is lifelong.") That's what the voters were asked to consider. They approved, but the Legislature dropped from statutes along with military 100% disability retirements. Ge3.5t the point? The Legislature in effect changed the Constitution by statues which failed to encompass the full range of Article X Section, leaving CMDVA unable to follow the Constitution's provisions and stuck with the flawed statute instead.

Article X Section 3.5 simply mentioned "permanent, 100% service connected, total disability" VA ratings with nothing at all to eliminate or somehow disqualify TDIU. We learned that CDMVA said the department had "legislative guidance" to exclude VA TDIU, despite the Constitution and the subsequent enabling legislation passed in 2007. In the 2006 ballot information, voters were told Referendum E was to address vets who were "100-percent permanently disabled when a mental or physical injury makes it impossible for the average person to hold a job." The voters did not vote to bar unemployability ratings but specifically to include that rating for property tax exemption.

Did the legislators decide to override the electorate after Article X Section 3.5 was added to the Constitution? Why did CMDVA end up with its rules being 180º away from what voters approved? How did the Constitution's provision for CDMVA to recognize military service total disability retirements disappear from subsequent statute ?

Exemption application forms, county web pages and various unofficial sources mention that VA unemployability awards were unacceptable to CMDVA, but nothing on a state form. CallinguCMDVA yields the same negative answer - "not acceptable." We found nothing else from the State Until this evening, discovered on the Colorado Legislative Council web page.

Tonight, the earliest info we've been able to dig up is a 2010 DOLA-published two-page flyer titled "PROPERTY TAX EXEMPTION FOR DISABLED VETERANS IN COLORADO." Now, there's nothing official about this and it is an information-only type document, and it came out four years after the Constitution's change.

DOLA wrote, "VA employability awards do not meet the eligibility requirements." This 2010 brochure is the earliest document we can find addressing unemployability, and the only state document. We've found nothing more official on which CMDVA policy was based.

What is the value of Colorado's disabled veteran property tax exemption?

Very simply, a totally disabled veteran's property is given a $100,000 exemption from the appraised value. A veteran's widow(er) also receives the exemption if the veteran was receiving the exemption before death. Sadly, no combat deaths qualify because the servicemember wasn't receiving the benefit at death, obviously.

Referendum E was explained to voters as an effort to thank Colorado's veterans whose service left them 100% permanently and totally disabled, about one percent of all veterans.

Vets still pay property tax but that burden is lessened on average about $466. Total cost to the state was estimated at $1,000,000 for extending the benefit to an estimated 2000 veterans.

There is also a benefit to the entire state in encouraging and supporting voluntary military service.

Referendum E, which became Article X Section 3.5 of our state constitution, is Colorado's largest benefit for qualified disabled veterans, although not to be compared to other states like New Hampshire or New Jersey where all property taxes are excused. The public expressed the intent of a little tax help so that totally disabled veterans might get and keep their homes, although the benefit applies only to homeowners. Other states provide different property tax relief. Oregon, for instance, exempts only $18,000 of the assessed value. Connecticut and a few other states offer 100% tax exemption. Colorado wrongly considers itself "somewhat above average" in disabled veterans' benefits. Remember: disabled veterans and military retirees are combat- proven good citizens and also economically beneficial to their states. Their pensions and retirements are huge injections of cash to local economies. Because of federal benefits, they are not burdens, and many states actively target these folks as new residents by offering such things as property and income tax relief.  Colorado can do so much more, especially with free state park camping, tax-exempt military retirement, and more significant property tax exemptions.

A little history - Colorado's Disabled Veteran Property Tax Exemption

Let's look at history...

"Unemployability" is specifically cited by CMDVA and the county governments as an unacceptable VA disability rating. While nothing in the Constitution or the 2007 enabling legislation bars VA unemployability ratings for permanent and total 100% service-connected veterans, CMDVA staff reports this has resulted from casual, unofficial legislative guidance after the statute was on the books. Today, the only written basis for barring unemployability ratings are some counties' application forms (hardly a legal foundation) and the CMDVA web site. It is barred because CMDVA says so, not because of any statute or Constitutional provision.

But history tells a fuller story. Colorado's referendum measures are described in detail by the Legislature at their web site, Colorado Ballot Analysis. Amazingly, there we read that unemployability was a substantive issue specifically provided for in the various drafts, the Blue Book and the final ballot analysis given the electorate to consider:

"Who qualifies for the tax reduction? Homeowners who have served on active duty in the U. S. Armed Forces and are rated 100-percent permanently disabled by the federal government due to a service-connected disability qualify for the tax reduction in Referendum E. Colorado National Guard members injured while serving in the U.S. Armed Forces also qualify. Veterans are rated 100-percent permanently disabled when a mental or physical injury makes it impossible for the average person to hold a job and the disability is lifelong. Nationally, less than one percent of veterans have a 100-percent permanent disability rating. About 2,200 veterans are expected to qualify for the property tax reduction in Colorado.
What are the fiscal implications? Referendum E affects property taxes paid beginning in 2008. The average property tax savings for those who qualify will be about $466. The total reduction in property taxes is estimated to be about $1 million in the first year. The state is required to reimburse local governments for the reduction in property tax revenue resulting from Referendum E."

When Referendum E was finally referred to the electorate to vote on, there was no unemployability language like the voter summary contained, and Article X Section 3.5 simply mentioned the specific qualifiers. The words "100% percent (1) permanently (2) and totally service-connected disabled (3)" were used. These are what the Constitution's Article X Section 3.5 requires CMDVA to require of veterans seeking the disabled veteran property tax exemption. "Unemployability" does not appear in the Constitution and that VA rating doesn't conflict at all with the Constitution's specifications.

The US Department of Veterans Affairs Veterans Benefits Administration confirmed that it has two such ratings. One is for 100% service-connected illnesses or injuries, and the other is for permanent and totally disabled 100% service-connected unemployability. VA generally refers to the latter as "TDIU" or "PDIU." Nothing in the Constitution or the subsequent statutes bars CMDVA from accepting claims of both groups but the state only accepts the first category. 

In doing this, about half of the eligible veterans are barred from the protection intended for them by the electorate who approved Referendum as Article X of the Constitution.

What the people approved should be the law of the land. If unemployability, or enlisted, or commissioned, or value of property, or age, or kind of injury, or type retired, or any other qualifier is to be applied in evaluating a veteran's application for the disabled veteran property tax exemption, that should be spelled out in law which reflects the Constitution. Only permanent, total, 100% service-connected and disabled are the words of our Constitution.

Permanent VA unemployability ratings were described by DOLA in the Blue Book for approval by the people and should not be disqualified by the state.

Today - Spoke to the United Veterans Committee

Thanks to kind and skillful editing by Bill Hanna, we circulated a single-page flyer touching on the basics of Colorado's difficulty to generously administer the Constitution's Article X Section 3.5 for disabled veterans property tax exemption.

Further, we even met with two C-123 Ranch Hand veterans plus a VA lady whose husband is one of our post-Vietnam veterans and his Agent Orange claim has sailed through just fine! That unexpected piece of good news is a blessing for my entire week!

We can only hope enough veterans and our advocates raise the question – why isn't the Colorado Constitution faithfully followed in this important area?

Overview & Support Materials – Disabled Veteran Property Tax Exemption Issue

Summarizing what we've learned in a couple months of investigation, this twenty page overview provides an orientation to the issue and the various details which leave us challenging the Colorado Department of Military and Veterans Affairs for improperly constricting the definition of "qualified veteran."

Their redefinitions have blocked two qualified groups of veterans, fully qualified per the Colorado Constitution Article X Section 3.5, for disabled veteran property tax exemption.