amendment e colorado 2022, Homestead Exemption to Surviving Spouses of U.S. Armed Forces Members and Veterans Measure

In November 2022, Colorado voters overwhelmingly approved Amendment E, a constitutional amendment expanding property tax exemptions for surviving spouses of deceased military members and veterans. This amendment extends an existing tax break on primary residences already available to seniors and disabled veterans to include eligible military widows and widowers.

Amendment E’s passage with nearly 90% of the vote continues Colorado’s strong support for its military community. However, critics have raised concerns about the growing costs of expanding property tax exemptions. This article will dive into Amendment E in detail – from its background and passage to eligibility requirements and fiscal impacts. We’ll also look at responses on both sides of the debate and what the future may hold for Colorado’s property tax laws.

Background on Amendment E

Existing Disabled Veteran Property Tax Exemptions in Colorado

Prior to Amendment E, Colorado had exemptions in place for two groups: seniors 65+ and disabled veterans. For qualifying seniors and disabled vets with a VA disability rating of 100%, the state exempts 50% of the first $200,000 in actual property value. So a $300,000 home’s taxable value would be reduced to $250,000. This essentially cuts property taxes in half on the portion of a home’s value up to $200,000.

Colorado’s legislature refers to disabled veteran exemptions as the “Homestead Exemption for Qualifying Seniors and Disabled Veterans.” Originally approved in 2006, these exemptions reduce property taxes and provide support for older Coloradans and disabled vets living on fixed incomes.

Details of Amendment E Proposal

Amendment E expands eligibility for the existing homestead exemption to surviving spouses of deceased military members who died in the line of duty and veterans who died from service-related injuries or illness.

The proposed amendment was unanimously referred to the ballot by Colorado’s General Assembly in 2021. If approved, surviving spouses must be receiving Dependency and Indemnity Compensation (DIC) from the VA to qualify for the new exemption. DIC benefits provide monthly payments to eligible survivors of fallen or disabled veterans.

Arguments For and Against

Supporters argued Amendment E properly honors sacrifices made by military families. They pointed out surviving spouses face financial hardship and the exemption helps avoid tax burdens.

Opponents didn’t dispute helping veterans’ families, but raised fiscal concerns about carving out more property tax exemptions. They said costs would rise for local government services and shift tax burdens to other groups. Some suggested directly subsidizing surviving spouses through a state fund rather than property tax cuts.

Passage of Amendment E in 2022 Midterms

Election Results

In November 2022, Colorado voters decisively chose to expand eligibility for disabled veteran property tax exemptions. Amendment E passed with an overwhelming 87.9% voting yes and only 12.1% voting no.

Despite some criticisms, the amendment saw broad bipartisan support. Its backers showed strong support across the state, carrying all 64 Colorado counties.

This emphatic victory indicates most Colorado voters agree with assisting military and veteran families facing hardship. Expanding existing tax relief was popular even amid worries about fiscal tradeoffs.

Reactions to Amendment E’s Passage

Supporters of Amendment E praised its passage as honoring fallen heroes. Groups like the American Legion and Rocky Mountain VAMC felt it rightly supported those who lost spouses in service to our country.

Many political leaders also backed the amendment. Colorado Governor Jared Polis said its victory showed “we honor military spouses and families who have given so much for our country.” StateRepresentative Tom Sullivan similarly said Amendment E’s approval upholds Colorado’s “commitment to care for veterans and their families.”

Skeptics of Amendment E accepted voters’ will but reiterated concerns about costs. The Colorado Municipal League cautioned that exemptions shift tax burdens and strain government budgets. They warned that more exemption expansions could negatively impact taxpayers around the state.

Impact of Amendment E

Number of Surviving Spouses Eligible

The Colorado General Assembly estimated around 883 surviving spouses would immediately qualify for expanded exemptions under Amendment E. However, as future eligible recipients enter the program, that number could grow to over 1,100 exempt properties.

This group represents a small fraction of Colorado’s total population but a significant addition to exemption beneficiaries. For context, over 200,000 seniors and 9,000 disabled veterans already receive homestead exemptions in the state.

Costs for State and Local Governments

The Legislative Council Staff projected Amendment E will reduce local property tax revenue by $525,000 in its first full year (2023-24) and $800,000 annually at full implementation. Costs will rise as more spouses qualify and apply over time.

Under Colorado law, the state must backfill losses to local governments from the homestead exemption. So the true cost falls on state coffers and taxpayers. Still, reduced property tax revenue can squeeze local budgets reliant on those funds.

Comparison to Other States

Prior to Amendment E, Colorado was one of only a few states not offering property tax exemptions to military surviving spouses. The National Conference of State Legislatures reported that nearly 30 states had some form of exemption for veterans’ surviving spouses as of 2022. So Colorado has now joined the broader national movement on this issue.

Eligibility and Applying for the Exemption

Now that voters approved Amendment E, surviving military and veteran spouses must formally apply to receive the property tax exemption. Here are details on qualifying and getting approved:

Qualifying Criteria for Surviving Spouses

To qualify, a surviving spouse must meet all the following criteria:

• Currently receive federal DIC benefits as a surviving spouse
• Own a primary residence in Colorado
• Occupy that property as their primary residence

DIC benefits generally go to spouses whose veteran died from a military-related cause or suffered a 100% disability before death. Spouses of active duty members who died in combat or training may also qualify.

How to Apply for the Exemption

Surviving spouses must submit applications to their county assessor’s office by July 1 to receive exemptions for that tax year. Required documents include:

• Completed state application form
• Official DIC benefit verification
• Property ownership and occupancy documentation

County assessors will approve applications for those meeting eligibility criteria. The exemption reduces taxes owed starting that assessment year.

When the Exemption Takes Effect

The tax exemption will first appear on tax bills for the 2023 assessment year, impacting taxes paid in 2024. For example, if approved in July 2023, the exemption would lower taxes calculated on the property’s 2023 assessment and owed in 2024.

Surviving spouses who qualify can receive the exemption each year as long as they still own and live at the property. They must recertify eligibility annually with their county office.

Responses and Critiques of Amendment E

While Amendment E garnered huge public support, expanding Colorado’s tax exemptions still prompted some criticism and debate.

Supporters’ Perspective

Proponents make a moral argument that surviving spouses deserve this recognition for their family’s sacrifice. Offering financial assistance also provides tangible help to a vulnerable population. Many point to the relatively small revenue impact compared to Colorado’s budget.

Supporters say the exemption helps correct a previous oversight excluding military widows and widowers. They argue it brings Colorado in line with nearly every other state.

Concerns Raised by Critics

Opponents agree with supporting veterans but question using property tax exemptions to do so. Their objections include:

• Fiscal impact – Projected revenue reductions will mean either cuts to local governments or higher taxes for everyone else.
• Inefficient targeting – Tax exemptions are an imprecise way to help those in need compared to direct subsidies based on income.
• Expanding exemptions – Amendment E sets a precedent for carving out more groups for property tax breaks in the future.
• Tax shifts – Exemptions shift tax burdens onto other groups not receiving breaks, like businesses and younger homeowners.

While respecting veterans, critics argue exemptions have downsides as policy. They believe direct assistance programs could better target relief based on financial need.

The Future of Property Tax Exemptions in Colorado

Looking ahead, Amendment E’s passage may influence Colorado’s future exemption policies.

Possible Expansions of Exemptions

Some advocates will look to expand exemptions further, citing Amendment E’s success. Potential targets include income-based exemptions or extending breaks to more groups like disabled first responders.

The recent popularity of exemptions suggests voters are open to easing tax burdens, at least for some favored groups. Supporters may pursue additional ballot initiatives while this appetite exists.

Opposing Views Against Expanding Exemptions

However, Amendment E’s success doesn’t necessarily mean open season for new exemptions. Critics can now point to its costs as reasons for restraint.

Some local government groups will push back hard against carving out more property tax breaks. Opponents may also turn to the legislature and courts to limit exemption expansions.

While Amendment E passed easily, there are still cross-currents in views on exemptions. How these debates play out will help determine if more tax changes come to Colorado.

Conclusion

With the conclusive passage of Amendment E, Colorado added to its support programs for veterans by expanding property tax breaks to surviving military spouses. This compassionate gesture honors profound sacrifices made by families across our armed forces.

However, Amendment E also renews important conversations about the best policies to serve Colorado veterans. Finding the right balance between property tax relief and funding vital programs remains a complex challenge. Striking this balance continues Colorado’s leadership in serving those who have given so much in service to this nation.

FAQ

Q: When do expanded exemptions take effect under Amendment E?f

A: The exemptions will first apply to taxes owed in 2024, based on 2023 property assessments. Surviving spouses must apply with their county by July 1, 2023 for the first year of eligibility.

Q: How much will Amendment E reduce property taxes for eligible surviving spouses?

A: Qualifying spouses will have 50% of the first $200,000 in actual property value exempted. So taxes owed will be cut roughly in half on the portion of a home’s worth up to $200,000.

Q: Who qualified for the disabled veteran exemption prior to Amendment E?

A: The original homestead exemption was for veterans with a 100% permanent disability rating from the VA. It also applied to all seniors aged 65 and older.

Q: Are there income limits to qualify for Amendment E’s exemption?

A: No, there are no income restrictions. Qualification is based on receiving DIC benefits as a surviving spouse and owning and occupying a Colorado home.

Q: How many other states have similar exemptions for surviving spouses?

A: As of 2022, around 30 states offered some form of property tax exemption for veterans’ surviving spouses prior to Colorado.