Colorado Bar Association: Statement of Support for Disabled Veterans and Gold Star Wives re: Property Tax Exemption

 Colorado Bar Statement:

"The Military and Veterans Affairs Committee (MVA) of the Colorado Bar Association has affirmed its support for two state legislative objectives for 2022. Both involve the state's partial Disabled Veteran Property Tax Exemption, a constitutional benefit since 2007.

Gold Star Wives, survivors of active-duty servicemembers, are denied the exemption because the legislation (HB-14-1373) and enabling statute provides the exemption for survivors of veterans who had the benefit at the time of death. Using the text, "the surviving spouse of a qualified disabled veteran who previously received an exemption," 

Colorado legislators apparently did not consider the issue of active-duty deaths. Loss of the servicemember on active duty precludes the 'previously received an exemption' requirement. Proposed is a redefinition of a qualified recipient to include survivors of active duty servicemembers who die in the line of duty.

The second proposed legislative issue is veterans with VA Total Disability for Individual Unemployability, or 'TDIU.' Just like VA's other 100% disability veterans whose wounds or illnesses are rated totally disabling, these vets are 100% permanently and totally disabled, but currently are excluded from the exemption. 

Their disability is total, not per the VA rating schedule for the particular disability, but because their service-connected disability makes them unable to maintain employment. A TDIU veteran has been found by the VA to be physically or mentally unable to ever work again due to their service-connected disabilities. MVA will propose redefining 'disabled veteran to include TDIU veterans."

We ALL must start reading the Colorado state constitution

Otherwise, we won't know what they're doing to us, or how.

Article X Section 3.5:

"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"

 I admit to a period of unAmerican cowardice. I failed to to stand up for myself, and in that failure also failed other Colorado veterans who were in the same situation. We were about 450 totally disabled military retirees, and as you can read in the clip from the Colorado constitution above, we have a property tax exemption. My failure was when DOLA and CDMVA denied me the exemption and disregarded the state constitution. In effect, these agencies and the legislature nullified parts of Article X Section 3.5.

I pointed out the constitution but was rebuffed – "No, we follow the law," insisted DOLA. There was no argument about the law being flawed, having left out those last fifteen words that clearly included us, clearly providing us a constitutional protection and benefit. Too bad, was the state's attitude. Go talk to your legislator. They failed to uphold the constitution or do anything about it. In fact, they NEVER did anything about this obvious conflict except make sure taxes were demanded and paid. Between 2007 and 2021, the estimate is that $3.825,000 was unconstitutionally taxed from these veterans.

My cowardice was in paying the tax even without the exemption. I have no excuse because I'd read both the law and the constitution's Article X Section 3.5, so I knew better. But I caved. My failing was to politely stand up for my constitutional rights,  Not as some "oath keeper" or such, but merely as a quiet American citizen.

 

My fear? Refusing to pay might cost me more somehow, in fines or something. In the extreme I might lose my house, get something on my credit report or some kind of legal trouble even while being passively resistant. "No. It's only a few hundred dollars," I reasoned.

But that was no reason. I abused the constitution itself. No excuse. I let the state, my fellow veterans and all Colorado citizens down by my inaction. Trying to fix it after I caved is no redemption. I faced some really wild and weird stuff flying in crates ranging from the T-33 and C-47 to Fat Albert (C-5,) and 26 years of military service but never caved or soiled my trousers; this time, I folded like a baby. 

I should have paid all but the exemption value, let the state seize my home for non-payment of taxes, and then tried to defend my position in court.

The first and only constitutional I was faced with (state or federal,) I backed down. I paid my property tax in full because DOLA and CMDVA said I had to, despite our state constitution. They didn't do their sworn duty, and neither did I. My shame is the greater.

Why? I must not have truly believed what I thought about the constitution. In this instance, the state constitution but the principal is the same. Jefferson would be, probably is, ashamed of me. I am.

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

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

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

Colorado's abandoned 100% disabled veterans – those rated "Total Disability for Individual Unemployability (TDIU)"

Voters approved Referendum E in 2006. We were asked whether a partial property tax exemption should be offered totally and permanently disabled veterans. We approved. But we didn't get what we voted for, not by half.

VA has two kinds of total disability awards – "TDIU" for total disability for individual unemployability, and 100% service connected permanent and total.

VA may increase certain veterans' disability compensation to the 100 percent level, even though VA has not rated their service-connected disabilities at that level. To receive the supplement, termed an Individual Unemployability (IU) payment, disabled veterans must apply for the benefit and meet two criteria. First, veterans generally must be rated between 60 percent and 90 percent disabled. Second, VA must determine that veterans' disabilities prevent them from maintaining substantially gainful employment—for instance, if their employment earnings would keep them below the poverty threshold for one person. 

Unhappily, our legislators really tightened up qualifications and locked out every single TDIU veteran. TDIU vets are carefully evaluated by VA, have at least one 60% permanent disability and a combination of factors making it physically impossible for them to work. Ever. Both vets are referred to as 100% VA disabled, but TDIU veterans have been refused the Colorado disabled veteran property tax exemption.

Consider the leeway given the legislature in the tax code. Clearly, the legislators had/have the power to follow Referendum E "in a manner that gives its words their natural and obvious significance." Must we suppose that totally and permanently disabled aren't "natural and obvious" enough words for TDIU?

Colorado Revised Statutes 2016, Title 39-3-202

TITLE 39(c) In enacting legislation to implement section 3.5 of article X of the state constitution the general assembly has attempted to interpret the provisions of section 3.5 of article X of the state constitution in a manner that gives its words their natural and obvious significance;

VA OIG 19-00227-226, Page ii, September 10, 2020

"Veterans are considered to have total disability when they have a 100 percent disability rating due to service-connected disabilities or if their service-connected disabilities make them unemployable. For the total disability to be permanent, the law requires the disability to be “based upon an impairment reasonably certain to continue throughout life."

"The Veterans Benefits Administration Inadequately Supported Permanent and Total Disability Decisions",

   

Update on Timing, United Veterans Coalition and More:

TIMING IS EVERYTHING

Today I've had some very welcome input from "those in the know" about a Gold Star Wives property tax
exemption efforts, and want to post it here.

First, neither United Veterans Coalition of Colorado nor Gold Star Wives is seeking action on such issues for 2021, and that's ideal because some groundwork is needed this year. There is no possibility of resolution until 2022 and more likely, not until 2023. There are many veterans issues on this year's schedule and it is vital to set priorities.

I'll continue efforts to contact UVC committee chairs about how they'd suggest moving forward. This kind of property tax relief is not on the list of UVC legislative objectives. UVC does have, however, the objective of legislation adding veterans with permanent and total individual "unemployability" (my thoughts) to the benefit. I like legislation rather than constitutional amendment, but certainly feel the priority should rest with action helping survivors as soon as politics and economics permit.

Here's UVC's state legislative objective. Note Item 7, which reads:

7. Support legislation to add ‘Individually Unemployable’ veterans (as defined by U.S.C.Title 38) to the Homestead Act property tax exemption

Colorado's Curious Management of its Disabled Veteran Property Tax Exemption, & the "Unemployability" Disqualification (updated May 12, 2021)

Five years ago I wrote about the curious sleight of hand employed to sell the voters on a worthy Colorado constitutional amendment but then the enabling legislation delivered a greatly watered-down statute. 

I backed off the subject after the United Veterans Committee (now United Veterans Coalition) made clear its nonsupport at that time. Understandably, it was best to avoid conflict and not mess up the carefully-crafted UVC legislative agenda. Happily, I understand that UVC has a related bill to increase the exemption as one of the 2021 objectives. Unhappily, I feel its cost of over $19M leaves no chance of success and UVC and the bill's sponsor might instead have pushed for Gold Star Wives and/or TDIU disabled veterans.

I refer here to Referendum E from back in 2006. Our legislature generously proposed a constitutional amendment (Article X Section 3.5) to provide a small partial property tax exemption to totally disabled veterans. Note the wording: "totally disabled veterans." Let's follow that bouncing ball of how definitions of  "totally disabled veterans" kept a-changing – and to finally covered as few vets as possible:

Here is the full text of Referendum E to amend the state constitution:

"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.”

This is important: Note the "one hundred percent permanently disabled" and the separate phrase, "due to a service-connected disability." Here in Colorado those words are now interpreted to be one kind of totally disabled veteran but could be read to refer to two kinds. That's right. VA has two different types of totally and permanently disabled veterans. "TDIU" for total disability for individual unemployability" and 100% service connected disabled for vets with a disability, or group of disabilities when added together, equalling 100%. 

Here is how the Legislative Council told us via the Blue Book what we were voting for:

"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."

An overwhelming 85% of Colorado voters approved this worthy benefit for those who served our state and nation. But then the lawmakers themselves got involved and took a fire hose to the benefit, watering it down quite a bit.

When Denver finally enacted legislation for the mechanics of Article X section 3.5 to work, Referendum E ended up much less broad than what we approved. The number of qualified recipients of the benefit was cut by more than half to protect budget resources for other projects.

Here is the actual text that finally delivered Referendum E to us as law:

"(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 a one hundred percent permanent disability through disability retirement benefits pursuant to a law or regulation administered by the department."

And next, here is the Colorado Department of Military and Veterans Affairs form for applicants, where there are two portions describing "totally disabled veterans."

"A “qualifying disabled veteran” is a person who meets each of the following requirements
- § 39-3-202(3.5), C.R.S . A “qualifying disabled veteran” is a person who meets each of the following requirements - § 39-3-202(3.5), C.R.S.• The veteran sustained a service-connected disability while serving on active duty in the Armed Forces of the United States. This includes members of the National Guard and Reserves who sustained their injury during a period in which they were called to active duty. • The veteran was honorably discharged.• The federal Department of Veterans Affairs has rated the veteran’s service-connected disability as a one hundred percent permanent disability through disability retirement benefits pursuant to a law or regulation administered by the department"

– and from the back page – 

"2. DISABLED VETERAN STATUS: To qualify, both questions must be true and you must attach a copy of your VA award letter verifying that you have been given a permanent disability rating by the VA." 

CDMVA web site:

"The Disabled Veteran Property Tax Exemption is available to applicants who sustained a service-connected disability rated by the Federal Department of Veterans Affairs as a 100 percent permanent disability through disability retirement benefits pursuant to a law or regulation administered by the Department, the United States Department of Homeland Security, or the Department of the Army, Navy or Air Force. VA unemployability awards do not meet the requirement for determining an applicant’s eligibility." 

So, after all this reading, do you see where the disabled veteran property tax exemption got watered down by more than half? It was through the disqualification of veterans rated totally and permanently disabled by VA for "unemployability." Tossed into the program are the words, "VA unemployability awards do not meet the requirement for determining an applicant’s eligibility."  Note that these TDIU people aren't veterans who are out of work, but instead vets who've been evaluated as being physically unable to ever work. And are monitored to make sure that remains the case.

Side note: the constitution included as eligible veterans those who were medically retired by their service as 100% disabled. The fourteen words describing these vets were left out of the law until 2016, when HB16-1444 brought the tax legislation into accord with the constitution.

(Here is an analysis I prepared in 2016 when I last worked on disabled veteran unemployability tax exemption issues.)

VA "unemployability" is its 100% disability rating for vets with at least one 60% service-connected issue and whose overall disabilities are so severe, so far beyond the scope for which VA assigned the 60%, that any meaningful employment is impossible. VA has other rating of "catastrophically disabled" but even when a vet is rated both unemployable and catastrophically disabled, that doesn't meet CDMVA's redefinition of Referendum E also is awarded to vets with at least a 60% service-connected disability:

"Veterans are considered to be Catastrophically Disabled when they have a severely disabling injury, disorder or disease that permanently compromises their ability to carry out the activities of daily living. The disability must be of such a degree that the Veteran requires personal or mechanical assistance to leave home or bed, or require constant supervision to avoid physical harm to themselves or others."

 Let's note that VA has two kinds of unemployability awards. The first is temporary or "IU," meant for periods of uncertainty about recovery or rehabilitation after surgery or illness, and the second is permanent (TDIU) for exactly that – permanent disability for life. TDIU veterans not only are medically determined to be unable to work, they are also carefully evaluated for that situation by the Veterans Benefit Administration before given the rating. Finally, they are carefully monitored by VA to check that they remain unable to work and both Social Security and IRS records are checked. 

Because Colorado references the VA totally disabled rating everywhere, we should look at how VA itself describes a totally disabled veteran. Read carefully and compare to Colorado's absolute disqualification of TDIU vets from the Disabled Veteran Property Tax Exemption. Here is the VA Office of Inspector General's very appropriate definition:

"Veterans are considered to have total disability when they have a 100 percent disability rating due to service-connected disabilities or if their service-connected disabilities make them unemployable. For the total disability to be permanent, the law requires the disability to be “based upon an impairment reasonably certain to continue throughout life."

"The Veterans Benefits Administration Inadequately Supported Permanent and Total Disability Decisions",

    VA OIG 19-00227-226, Page ii, September 10, 2020

Clearly,  veterans with total disability, including TDIU, is what voters thought they were approving by votes for Referendum E back in 2006. So where did the Colorado prohibition of unemployability for the benefit come from?

I asked CDMVA and they said ask DOLA. I asked DOLA and in 2014 was told "some legislators" wanted that limitation. Legislators. Not the voters. Legislators introduced (snuck in!)  their own idea of
disqualification into what voters more broadly approved as our constitutional amendment.

My view: Veterans with a 100% disability rating, including TDIU, were provided the small tax exemption via Referendum E when we voted approval. TDIU eligibility should be corrected by legislative action. I do not favor broadening the Disabled Veteran Property Tax Exemption below the 100% disability level as the impact would be far too burdensome on taxpayers. 

Further, veterans often have disabilities common among folks their own age group, such as COPD, diabetes, hypertension and hearing loss. It would be unfair to a taxpayer with COPD to pay full property taxes while the veteran neighbor with a 50% COPD disability rating doesn't. The obvious need for tax relief is for survivors and the totally disabled veteran! Full stop.

Conclusion: A few legislators hijacked Referendum E and Article X Section 3.5 of the constitution, doing decades of harm to a large number of otherwise qualified Colorado totally disabled veterans and their survivors.

Time to set this right! What say you – Is 2022 too soon?

Colorado Disabled Veteran Property Tax: A Colorado Editorial

VA "UNEMPLOYABILITY" - How did it disqualify vets from Colorado's Disabled Veteran Property Tax Exemption?
by Wes Carter, National Chairperson, The C-123 Veterans Association for the Fort Collins Coloradoan

In 2006 Colorado voters amended our constitution to provide totally disabled military veterans a small partial property tax exemption. This is now Article X Section 3.5 of the constitution and 39-3-202 of our statutes. The Legislative Council 2006 Blue Book explained to voters that federal VA disability ratings are the standard followed by Colorado to qualify veterans for their exemption.

VA has two ratings recognizing a veteran’s total and permanent disability. One rating is for injuries VA rules consider 100% disabling. The other rating is for severe military injuries even worse than the disability percentage VA rules allow for that particular injury or illness, and which make the veteran unable to work for the remainder of his/her lifetime...that rating is termed, "Total Disability Individual Unemployability" (TDIU.) Both of these VA ratings are for total and permanent disability based solely on military illnesses or injuries. 

Nothing in the law permits denying TDIU veterans the tax exemption, yet the state refuses to honor any applications without a basis for refusal. Looking back to the Blue Book’s Referendum E explanation, voters were told it is for veterans so disabled by military illness or injury that meaningful work is impossible for their remaining lifetime. Referendum E passed by a decisive four-to-one margin.

Because voters amended the constitution addressing veterans whose permanent and totally disabling illnesses and injuries caused unemployability for life, there is no justification for agencies to invent disqualifiers for TDIU.

But that’s what happened, and it’s wrong.

As per Colorado’s constitution, federal VA ratings must be respected. Veterans rated totally and permanently disabled, including TDIU, must be afforded their lawful property tax exemption.

Other Coloradans wouldn’t tolerate being unconstitutionally taxed. 

These veterans have been patient long enough.

Veterans need to very carefully read DMVA Property Tax Exemption & UNEMPLOYABILITY web page. Have fun figuring out what they mean!

Carefully read this DMVA web page on the property tax exemption and Individual UNEMPLOYABILITY.

"Unacceptability?"  Individual unACCEPTABILITY? Did DMVA perhaps have a little typo and actually mean unEMPLOYABILITY???

Briefing Package – Problems with Colorado's Disabled Veteran Property Tax Exemption, & Recommended Solutions

Background & source documents

We have summed up the issues with HB07-1251, Referendum E, and Article X Section 3.5 of the Colorado Constitution...CLICK to download the complete briefing packet.

Also quite informative is the legislative history for HB07-1251. CLICK to download that 33-page resource.

Late Bill Can Save Colorado $8M – ONLY IF Senate or House Leadership Will Get It to the Legislature

Leadership in the Colorado Legislature has an opportunity to actually save Colorado over $8M by enacting legislation. Act now...this legislative session. Not next year

Veterans affected by the problems surrounding Referendum E, and the resultant Article X Section 3.5 in the Constitution, and subsequent flawed legislation have two clear approaches to correct the disabled veterans property tax exemption:

1. corrective legislation, with "late bill" restoring military disability retirements and unemployability provisions  of the Constitution, to begin in 2017, or...
2. the Supreme Court to declare unconstitutional statutes and regulations related to Referendum E/Article X Section 3.5

1. A legislative solution through a "late bill" is a much, much cheaper solution. If enacted, it will provide the exemption for application in 2017.  Because Colorado laws prohibit retroactive correction., there can be no payment for years when the exemption was withheld. But...

2. If veterans gain relief from the Supreme Court, it is probable jurors will grant relief retroactive to the 2007 tax year, because that's when abuse to the Constitution's Article X Section 3.5 began. Thus, benefit of the exemption will be made effective from 2007 on, ten years earlier than what the Legislature can provide! Nine years times as as many veterans as might be affected by this solution (estimated 2000), times an average of $466 each.

To both save money and help veterans now, leaders in the Senate and House much permit the necessary late bills to be released for the Legislature to act on ...now!

Colorado will fix the problems surrounding Article X Section 3.5...but when? Will it be too late?

Correct the property tax exemption!

Colorado's legislative leadership needs to carefully consider approving a "late bill" this session. This year, not next! Next year is too late for too many of us. Too late for our widows also!

There's pressure against any such late bills introduced after Senate and House deadlines unless the proposed statute addresses issues serious problems that must be corrected without delay.

I contend that's us. Having had our Constitutional rights denied for eight years since Referendum E was approved in 2006, unless legislation is approved this year it will be 2018 before the property tax exemption is of any benefit. If House or Senate leaders insist on postponing introduction of legislation fixing the problem, a bill passed next year will be approved too late for 2017 taxes and veterans won't have use of the exemption until the following year.

Because a totally disabled veteran is not just a veteran, but one with grievous, life-changing military injuries or illnesses. Only one percent of all disabled veterans are 100% service-connected. These injuries or illnesses drastically reduce our remaining years. Our families are hit hard, especially kids as we try to live going forward on a VA disability check...hard to look forward to high school and college.

Cancer, paralysis, loss of arms or legs, ALS...it takes a very serious issue for VA to rate a veteran at 100% disabled and thus, eligible for the disabled veteran property tax exemption. Colorado's mistakes in the 2007 legislation passed to implement Resolution E (Article X Section 3.5) have denied property tax relief for eight years and we just can't wait too much longer. Further, our widows are forever denied the property tax exemption unless, before our deaths, we'd been receiving the benefit.

We don't have years to wait. There's real meaning behind the phrase "Constitutional Rights Delayed are Constitutional Rights Denied." Don't make us wait past our deaths for Colorado to finally resolve the problem caused by the Legislature in 2007 with its lawed statutes on Referendum E. Too many of our fellow veterans have passed during these last eight years when they should have been receiving the property tax exemption – and every one of their widows is now denied the exemption supposedly guaranteed in Article X, Section 3.5 of the Colorado Constitution.

This can and should be fixed by advancing the late bills now with the President of the Senate and the Speaker of the House.