Severely Injured Veterans Pay 'Penalty Tax' in California

By: Steve Yuhas

California had an opportunity to do more than just talk about supporting American servicemen and veterans when it considered Assembly Bill 1485.  Legislators had the chance to decrease the burden of property taxes in a housing market that has the median price of a southern California home set at over $600,000.  Like many bills, AB1485 came with self-congratulations and press releases about helping veterans, but in the rush to pat themselves on the back the bill died and real people are suffering.

Veterans should not have been surprised when it died – after all California has other priorities.  To start with it must find more than $20 billion a year to provide benefits, or pay for the incarceration, of illegal immigrants.  The sad part is AB1485 would have only cost a mere $16.7 million a year, but it would have provided real relief to several thousand severely injured vets.

Like many other states, California provides a property tax exemption to 100% rated service-connected disabled veterans.  Because AB1485 failed, the 2008 exemption rates will allow all 100% rated vets the ability to claim an $111,296 exemption and $166,944 for 100% rated vets with a household income of less than $49,979.  Still, that is little relief in a housing market that continues at record pace.

In California the devil is in the details and so are the problems and AB1485 was no exception.  The problem with 1485 was not only the fact that it failed, but that California still has not fixed the problem that the most severely injured veterans in the state will never be able to utilize the greatest exemption.

The formula for compensation is quite simple.  The more disabled the veteran, the higher the rating; the higher the rating the higher the compensation and in California compensation counts as income – despite the fact that it is tax exempt and being paid because someone was injured not because someone is earning it through work.  That means that through no fault of the veteran that California legislators do not take into account the little known Special Monthly Compensation (SMC) scheme put in place by the Department of Veterans Affairs (VA).

SMC veterans are the most severely injured veterans in our nation.  Recipients of SMC are defined by the VA as being “disabled beyond a combined degree percentage or due to special circumstances” and are disabled beyond what the typical 10 – 100% rating system can fairly provide.  SMC vets are those who are so disabled that further compensation is warranted because the numeric disability rating system is inadequate to properly compensate them.

That is very disabled and California believes they do not deserve the highest or total property tax exemption.  How very sad.

True, there are some SMC veterans that fall beneath the $50k maximum family income, but for those who have the most debilitating of injuries, they will not be able to take the higher exemption.  That means that conditions like blindness, paraplegia, quadriplegia, and the loss of limbs or other traumatic injuries that combine multiple debilitating injuries – do not matter to California because of an arbitrary number attached to the property tax exemption scheme.

It is not because of something that a veteran did or because they work outside the home, although it is entirely proper for them to do so.  Rather, it is entirely because California considers compensation for an injury sustained while serving in the military as income.    

The more disabled a veteran is the less likely he or she is to receive the highest tax exemption.  Contrary to the intent of legislators who set up the property tax exemption in the first place.

As more and more young people return to the United States with injuries that would have killed them a decade ago it is sad that the state of California applauds them one day and sends confiscatory property tax bills the next.

California has a duty to protect veterans and their families as much, nay more, than it protects and provides benefits to illegal immigrants.  After the failure of AB1485 veterans across the state must be questioning what the priorities are of the people who run California. 

The state can still make good and allow SMC veterans who are severely injured and are pushed over the threshold amount to qualify for complete exemption.  Just pass a law (we pass thousands of them a year).  It only takes some leadership and even Sacramento should find it palatable to exempt a mere $16.7 million to the most severely injured veterans in the state.

It must be seen as ironic that there is enough money to fund illegal immigrants for collegiate educations, but not enough money to provide full tax exemptions to those who gave all but their lives to their country.

Some people say that people can tell how sophisticated a country is by the manner by which they treat the elderly, but it is more telling of a society in how a state treats their vets.

If a state can afford to fund a litany of programs that attract and maintain illegals surely it can find a few million dollars to exempt people who gave life or limb to the nation that these same immigrants are flooding to.

In the end – if it is a question of money just ask the people of California who should receive it – illegals in the form of college or severely disabled veterans in the form of property tax exemptions.  If I’m right tax exemptions would pass tomorrow; if I’m wrong – I’m moving to Mexico where service is rewarded and illegals are returned to sender.

Steve Yuhas is a radio talk show host on AM 600 KOGO and may be reached at steve@steveyuhas.com or www.steveyuhas.com