A DISABLED VETERAN AND MILITARY RETIREE LOOKS AT HB23-1084 -Continuation of Military Retirement Benefit Deduction in Colorado

This measure deserves the full support of the Colorado legislature and the voters. It certainly has mine!

HB23-1084 is important. It carries a small and reasonable cost that brings advantages to the state well beyond the investment. It should be approved this session.

DECLARATION: Neither this bill nor HB23-1002 will affect me as my retirements are already exempt from Colorado’s income tax. I am a VA-rated 100% disabled veteran and also a 26-year military retiree separated from the Air Force at a 100% medical disability, thus my state income tax is already exempt for other provisions of the law.

At first glance, I believed HB23-1002 for disabled veterans should be a priority over HB23-1084. Instead, I now urge approval of both measures because they are good for veterans and great for Colorado. This year both bills are firmly supported by the United Veterans of Colorado.

Since 2011 I’ve urged legislative action to help other totally disabled veterans and thus have long supported measures such as HB23-1002. Colorado’s constitution currently provides a partial property tax exemption to VA-rated 100% disabled vets but fails to address VA’s second category of disabled veterans who are totally disabled, those the VA rates as “totally disabled for individual unemployability (TDIU.)

HB23-1052 addresses that oversight and supports nearly 3,000 of Colorado’s most seriously and totally disabled veterans whose injuries or illnesses prevent any employment. I expected to strongly favor only this initiative because of the moral imperative of meeting the needs of these vets. 

I’ve changed my view. I see both measures as vital legislation for Colorado in 2023, particularly because HB23-1084 is an economic “no-brainer,” bringing much more to Colorado than it costs

Retired military who chose Colorado as their home following active duty do so for many reasons. Clearly, important among them is a favorable treatment of their military retirement income. Colorado currently exempts a modest portion of a military pension; HB23-1084 merely extends it to 2034. This measure pays for itself far beyond its modest cost,

In 2021 28 states exempted all of a military retirement from state income taxes, and that number rose to 32 in 2022. Eleven states, including Colorado, currently offer an exemption for at least some portion of a military retirement. Seven states and the District of Columbia have no military pension exemption. To our disadvantage, Colorado will join that short list in 2024 unless HB23-1084 is approved to continue our partial exemption.

Governments and legislators see the importance of being “veteran-friendly” but unfortunately Colorado only ranks a modest 27th among the states.

Being “military-friendly” recognizes a retiree’s long service to the state and nation and it makes great economic sense. Thanks in part to the current partial exemption provided military pensions in Colorado, our 50,000 retired military have brought their steady retirement income. Most brought their military experience, skills and knowledge to join our workforce or start their own businesses as second careers. Servicemembers already here have been encouraged to stay after leaving active service, and others selected our state as their new home, in part because of the current partial exemption for military pensions.

States value retired military members because they bolster the state economy by bringing retirement income and non-taxed VA benefits, like the GI Bill. Typically, their federal benefits leave them independent of state support services. According to a California study considering state taxation of military pensions, researchers determined there would be significantly more jobs, millions added to total personal income, billions added to gross state product and to business sales if military pensions were exempted.

Another recent study by the Towson University Regional Economic Studies Institute (RESI), found that “If (the state) does not exempt military retired pay from state income taxes … countless other service members and their families will opt to retire to military retiree-friendly states.”

The Towson study also stated that when military retirees reenter the workforce, their taxable income generates an economic impact in addition to that of their military pensions. Their second careers can last from 15 to 20 years. Military retiree household spending — groceries, rent, mortgage payments, automobile purchases and recreation spending, to name a few items — also benefits the economy. As average to above-average wage earners, these are the folks Colorado wants to attract and keep.

HB23-1084 is a golden opportunity to increase state revenues by passing legislation that would continue to partially exempt military retired pay from state income tax. This legislation would help stem a migration of skilled and experienced personnel who retire from the military and leave Colorado because of state income tax higher than other states.

Military vets are good neighbors who pay their bills, volunteer in the community and have an appreciable level of discretionary income. Most other states have learned this and realize that exempting military pensions from state income taxes means losing a little in revenue but building a stronger fiscal base by increasing the total number of state taxpayers. States that understand the economics of exempting military retired pay reap the benefits that come with creating an attractive fiscal landscape. 

We need to keep our “landscape” military-friendly with HB23-1084.

The legislature hid their cards from us with Referendum E in 2006

 In 2006 the legislature referred an issue to the public for a small property tax
exemption for totally and permanently disabled veterans. This was done via SCR06-001. But the legislature hid some of their cards, not telling us all the details, so what we approved was not what we got!

This issue reached the voters as Referendum E in 2006 and was then overwhelmingly approved. Colorado voters believe in protecting our disabled veterans with such important benefits!

The legislature then created "enabling legislation" in the form of HB07-1251 to set into our statutes the provisions of the newly-approved Referendum E.

That sums up the trouble we now have in our state's small disabled veteran property tax exemption.

You see, we were asked to vote on a straightforward text the legislature gave us in the Blue Book:

"AN AMENDMENT TO SECTION 3.5 OF ARTICLE X OF THE CONSTITUTION OF THE STATE OF COLORADO, CONCERNING THE EXTENSION OF THE EXISTING PROPERTY TAX EXEMPTION FOR QUALIFYING SENIORS TO ANY UNITED STATES MILITARY VETERAN WHO IS ONE HUNDRED PERCENT PERMANENTLY DISABLED DUE TO A SERVICE-CONNECTED DISABILITY."

We didn't see the cards the legislature hid behind up their sleeves (or is it behind their backs?) They didn't show us anywhere in the Blue Book that SCR06-001 also had a description of the qualified disabled veteran that, in effect, eliminated almost half of Colorado's veterans who'd been totally and permanently disabled in the line of duty. They didn't tell us anything about their description in what we approved, but they certainly put their hidden cards into Article X Section 3.5 and the enabling statute HB07-1251:

(1.5) For purposes of this section, "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 or a pension pursuant to a law or regulation administered by the department, the department of homeland security, or the department of the army, navy, or air force

The words in highlighted yellow cut thousands of Colorado's totally and permanently disabled veterans, injured in the line of duty and with honorable service, from the property tax exemption we thought we approved for them. We never saw and we never approved those words or anything like them!

The VA has two types of disability ratings for veterans who are totally and permanently disabled in the line of duty. One is called "100% rated" and the other is "Total Disability for Individual Unemployability," or TDIU.

Both ratings are based on the fundamental concept in the VA for compensation based the degree of an injury's impact on the veteran's ability to earn a wage after service: 

• The "100% rated" is based on standard tables for the average earning loss caused by the average injury.

• "TDIU" is based on the actual earning loss caused by a worse-than average injury. A TDIU veteran has been individually assessed by VA as having an especially worse-than-average injury rendering him/her actually unable to ever work again.

Colorado's voters thought we were voting for, as the Blue Book put it for us to better understand:

"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"

Colorado's legislators and administrators would have us accept that 100% is not the same as total. That the amendment and the statute exclude TDIU veterans with total and permanent disabilities but accept 100% veterans with total and permanent disabilities.

Folks, the legislature simply hid their cards....or did they have them up their sleeves? 

We didn't get what we voted for. We didn't protect all the veterans we thought we were protecting with Referendum E!

June 26: American Legion Votes Support of Gold Star Wives Property Tax Exemption

This morning the Department of Colorado of the American Legion, meeting at their annual conference in Colorado Springs, approved a resolution for Gold Star Wives inclusion in the Disabled Veteran Property Tax Exemption program.

The resolution initiated with the Legion post in Fort Collins. 

The Legion's resolution urges UVC to include the issue in its 2022 state legislative agenda. The coalition's agenda is yet be finalized. Obviously the legislature itself must agree to a solution during the next session.

Left unclear is whether a constitutional amendment or an act of the legislature will be the preferred approach.

The Legion's approved resolution joins that of the Military and Veterans Affairs Committee of the Colorado Bar Association, plus our own from the C-123 Veterans Association. It remains for the Gold Star Wives, not third parties, to actually initiate UVC consideration of this issue.
(click: resolution of American Legion Department of Colorado)

How'd that Colorado Senate vote go for Gold Star Wives' property tax exemption?

June 7 2021: HOW DID COLORADO STATE SENATORS VOTE TO PERMIT GOLD STAR WIDOWS THE SAME PROPERTY TAX EXEMPTION COLORADO GIVES DISABLED VETS' WIDOWS? One Guess.

   DEMOCRATS = 100% NO              GOP = 100% YES

Interesting. And very, very  revealing. Every senator* who voted "YES" to honor our Gold Star Wives with SJR21-010 in May seemed to see things differently on June 7, and voted "NO" on HCR21-1002.

Thumbs down on spending $93,000 to permit these 140 widows of active-duty troops same small partial property tax exemption Colorado now gives survivors of our 100% disabled veterans.

Here are their empty words from SJR21-010 tossed to the wind, now shown to be useless and meaningless:

"That we, the members of the Colorado General Assembly honor the pride and the pain of the parents and partners and children and siblings of our fallen heroes and recognize the families of these proud patriots with an expression of profound gratitude and respect."

* voting no:

• • State Sen. Julie Gonzales 
  D District 34, Chair

• 
  

• • State Sen. James Coleman
  D District 33, Vice Chair
  
  • State Sen. Sonya Jaquez Lewis
  D District 17
  
  
  
  
  
  

THE BIG PROBLEM: How to pay for TDIU Vets Getting the Disabled Veteran Property Tax Exemption

 There's no getting around the biggest obstacle to any Colorado veterans benefit – just where the heck do we get the money to pay for it?

In Colorado's state house that is the Number One question on every bill. Trying to get the Disabled Veteran Property Tax Exemption to cover VA 100% permanent Total Disability for Individual Unemployability (TDIU) vets will be no different. 

I don't know the necessary procedures but will float a couple ideas here. First, the goal is to get the exemption for approximately 4622 veterans now rated 100% disabled TDIU by the VA. That's approximately $2.6 million added to the overall Homestead Exemption program costing over $159 million. 

Currently, veterans and their survivors are only 2% of that total with the exemption restricted to VA 100% schedular vets, so adding TDIU will make veterans just under 4% of the program. The number of vets that I use already considers the fact that 13.3% are also able to claim the senior exemption, and already factors in the point that 80% of all the Colorado TDIU vets own homes to exempt. Finally, the average value of each exemption is considered, leaving the goal at $2.6 million.

The Legislature needs to appreciate that voters already approved every 100% disabled veteran for the Disabled Veteran Property Tax Exemption. The wording of Referendum E in 2006 was very clear, as was the explanation in the Blue Book. It was the legislators, not the voters, who opted with the enabling legislation for Article X Section 3.5 to invent the unemployability barrier. We need to.get our tax laws back into line with the state constitution!

– POSSIBILITIES –

1. Cut the average veteran and survivor exemption benefit in half to stretch the present funding to include TDIU recipients. The Legislature already has the power to do this per Article X Section 3.5 of the state constitution

2.  Likewise, reduce the benefit to each senior homestead exemption to capture $2.6M. This would be a much less severe reduction for the recipients than #1 above, approximately 0.02 for about just $11 less per year per exemption

3. Divert a portion of the funds CDMVA now uses for grants

3.  Add an optional $5 contribution to each state income tax return

4. Divert $2.6M from Colorado Economic Development Commission

5. Ideas??

Colorado Legislature: Sponsor Needed for 100% Disabled Veteran Property Tax Exemption

 TOTAL DISABILITY for INDIVIDUAL UNEMPLOYABILITY
= Equals =
100% VA Total & Permanent Line of Duty Disability

Every Colorado 100% VA disabled veteran should be eligible for the Disabled Veteran Property Tax Exemption. It is wrong to deny TDIU vets the exemption the voters approved for ALL 100% VA disabled veterans when we approved Referendum E in 2006, Colorado Constitution Article X Section 3.5

A veteran is considered totally and permanently disabled if they have received a disability rating of 100% for service-connected disability compensation and the VA does not expect the condition to improve. Such language indicates that the rating of total disability is permanent.

By illogically and unfairly denying them a state constitutional protection, Colorado disrespects over 4000 TDIU veterans rated by the VA as 100% totally and permanently disabled in the line of duty. Colorado denies TDIU vets, totally disabled for the rest of their lives, our Disabled Veteran Property Tax Exemption. In doing so Colorado shows its disregard for their dedicated military service and their life-changing sacrifices. 

Colorado is unique among the states in denying benefits to this group of 100% VA disabled veterans.

 

Colorado Legislature: Sponsor Needed for 100% Disabled Veteran Property Tax Exemption

 

Proposed Bill to Support 100% Disabled Veterans

Colorado Legislature: Sponsor Needed for 100% Disabled Veteran Property Tax Exemption

Proposed Bill to Support 100% Disabled Veterans

Seeking support within United Veterans Coalition for Gold Star Wives Property Tax Exemption

Given that Colorado's United Veterans Coalition requires unanimous agreement on a legislative objective, it seems best to begin asking the various member organizations for a chance to discuss Gold Star Wives property tax exemption. As I understand the process, issues are put forward in June to begin consideration and the agenda is decided upon in November. 

The American Legion has already advanced its resolution asking UVC to consider the Gold Star Wives property tax exemption. Efforts are also underway to discuss the issue with other groups.  UVC has to balance the many concerns it faces, and Gold Star Wives property tax exemption is but one that bears discussion. 

That discussion has already begun with some veterans' organizations and will continue by reaching out to each organization's UVC member representative. Their input is important but the only suggestion thus far is to limit the effort within UVC, respecting its role as the principal voice of Colorado's 460,000 veterans.

It is still unclear about whether a constitutional or legislative solution will be required, but a couple drafts for both approaches are ready for review. Hopefully, the legislature can act and avoid the difficult process of a constitutional amendment. That's a question for the Legislative Council Staff or the Office of Legislative Legal Services but not right now: As with meeting with our legislators, it is necessary to wait until this very busy session wraps up in early June.