Veterans groups in Wisconsin are protesting an effort by state lawmakers to cut back on a property tax credit the state offers to veterans who are disabled.
Wisconsin law gives veterans who are completely disabled, as well as their surviving spouses, a refundable income tax credit for the property taxes paid on principal dwellings. But some veterans may soon see their benefits trimmed. The state’s Joint Finance Committee voted 12-4 to reduce the amount veterans could be reimbursed to $2,500 a year.
Though the measure passed, no Democrats voted for the legislation.
According to Republican Rep. John Nygren, co-chairman of the Joint Finance Committee, the average property tax credit for disabled veterans is currently $2,900 — about $400 more than what veterans would be able to receive under the new program rules.
The tax credit, which began in 2005, cost the state about $17.7 million in the last fiscal year, according to the Milwaukee Journal Sentinel. Nygren told the newspaper that lawmakers had to do something with the tax credit since it was one of the fastest-growing programs in the state.
“Our major concern was about making sure we could continue this with the people who really need it and making it consistent with other tax credit programs,” Nygren said.
As veterans groups vocalized their discontent, Republican Gov. Scott Walker has said through spokesman Tom Evenson that he wants the legislature to “fix the issue.” If the problem is not remedied, Evenson said Walker plans to “review the budget in its entirety when it gets to his desk,” according to the Wisconsin State Journal.
Some states have similar tax programs in place to assist disabled veterans with property taxes.
In Massachusetts, all veterans can take $200 off of their property tax bill for every 25 hours they spend volunteering as part of the Melrose Veteran Volunteer Tax Work Off Program. The catch is that the program, which just opened in May 2013, was only opened to 15 veterans.
This new program is likely a follow-up to a 2006 law signed by then-Gov. Mitt Romney that increased property tax exemptions for disabled veterans and gave a 5-year tax exemption to spouses of veterans who were either killed or went missing in action since Sept. 11, 2001.
There are also national programs such as the Disabled Veterans National Foundation, which offers grants to veterans so they can afford to stay in their homes as part of its Grants to Provide Stability Home Program.
However, not all of these programs are designed specifically for disabled veterans or veterans who are disabled 100 percent.
Influx of disabled veterans
In 2007, the Wisconsin veterans’ property tax credit program paid $1.3 million to 458 claimants, according to the Journal Sentinel. In 2011, the program had 5,892 claimants and paid out $17.2 million in tax claims.
In order to cut costs, the committee also decided to limit eligibility based on veterans’ income. According to the Milwaukee Journal Sentinel, the tax credit will begin to phase out once income reaches a limit that depends on tax filing status. The benefit will start to disappear at $75,000 in annual income for veterans who are married and filing separately, $60,000 for heads of households, $50,000 for singles, and $37,500 for people who are married and filing separately.
Surviving spouses and spouses of servicemembers killed during active duty will also be affected by the change in the law.
“Apparently some committee members feel the sacrifices made by severely wounded, injured and ill veterans are just another budget item,” Al Labelle, Disabled American Veterans state legislative director, told the Journal Sentinel.
Mike “Gunner” Furgal, a Marine who served in Vietnam, called the limits on the tax credit “a slap in the face of veterans,” and said it would be a big topic at the next Veterans of Foreign Wars meeting.
“I think it’s a shame when we have a budget surplus that they’re balancing the budget on the back of veterans,” he said to the Journal Sentinel.
Republican state Rep. Dale Kooyenga, an Army Reservist in the Iraq War, said he voted for the changes in the tax credit law because he thought it would make the program fairer.
“Does it make sense to have a credit that could apply to a millionaire? You could have a million-dollar house but 100% of your property taxes would be paid by the state,” he said, according to the Journal Sentinel.
Kooyenga added that the state has other programs for veterans, including job training and education benefits.
More harm than good?
But explanations like Kooyenga’s are not cutting it for the majority of veterans, including Jason Johns, the legislative officer for the Wisconsin Military Order of the Purple Heart. He earned a Purple Heart after he was injured by a land mine in Iraq in 2003.
“The property tax refund when it was established was a big deal for everyone. Property taxes are pretty high in Wisconsin, and this was a benefit for veterans who need it the most,” Johns said.
In an interview with the Journal Sentinel, Johns raised concern about the $2,500 cap, telling the Journal Sentinel that because property taxes vary throughout the state, that amount will go farther for a veteran living in a $200,000 home in low-tax Rhinelander, Wis., than it will for a veteran living in a $200,000 home in relatively expensive Milwaukee.
He added that the cap on incomes likely won’t affect many veterans because those who are 100 percent disabled are often unable to work and have a fixed income. Many disabled veterans spouses don’t work either because they have to take care of the veteran, he said.
But some veterans who are 100 percent disabled do work. Just ask 75-year-old Richard Marbes.
Marbes, who lost his right leg in the Air Force and has cancer, says his leg amputation led to heart problems and other ailments. Though he is considered 100 percent disabled, Marbes worked for about 20 years as a graphic designer. Though he had a job, Marbes said it would have been harder for him to make ends meet without the help of the $3,000 tax credit he had been receiving.
Still, Kooyenga insists that veterans will not be negatively impacted.
“We went out of our way to make sure people pay their fair share. If you’re making over six figures, then we should look at limiting the credit,” he told the Journal Sentinel.
Now veterans groups in the state say they plan to lobby to defeat bill.
“The governor has been a good friend to the veterans community and we’re hoping that he’s going to stand with us when the time comes,” David Kurtz, adjutant of the American Legion of Wisconsin, said to the Wisconsin State Journal.