LAWTON – A tax issue in Comanche County provides another example of the proverbial “law of unintended consequences.”
In 2004, both chambers of the state Legislature unanimously endorsed House Joint Resolution 1044, a referendum on a property tax exemption for certain military veterans.
It called for a vote of the people on State Question 715, a constitutional amendment to authorize an ad valorem tax exemption for military veterans who have a 100% permanent disability “sustained through military action or accident or resulting from disease contracted while in ... active service.”
Totally disabled veterans, and their surviving spouses, would be entitled to claim an exemption for “the full amount of the fair cash value” of their homestead.
HJR 1044 was authored by two southwest Oklahomans, one from Lawton and the other from Marlow, and was co-authored by four other southwest Oklahoma legislators.
SQ 715 was endorsed by 84% of the 1.4 million voters who voted on the proposal in November 2004, and it went into effect in 2006.
The legislation is intended to reward disabled veterans and their spouses for their military service.
However, it has had a marked impact on the Comanche County budget. The tax exclusion has “pretty much” eaten up all of the increase in ad valorem taxes the county realized in the current Fiscal Year 2021, county Excise Board Chairman J.P. Richard said.
“Our property-tax gains – which totaled $6,430,359 in Fiscal Year 2020 – were offset by the value of the exemptions,” he said. The lowest exemption claimed was $22 and the highest amounted to $8,125, Richard said.
BIGGEST ‘HIT’ FROM TAX EXCLUSION IS TO SCHOOLS
Comanche County Assessor Grant Edwards said that of the $74 million in taxes the county collected in 2019, almost 78¢ of every tax dollar was dedicated to schools; the City of Lawton received 9.29¢ for the sinking fund that retires the city’s bonds; the County Health Department received 2.56¢; and 10.23¢ was earmarked for the county, a portion of which was distributed to volunteer fire departments, County Treasurer Rhonda Brantley said.
Common education receives some reimbursement from the Legislature for ad valorem tax exemptions, but Career Technology centers get none, Richard said. The Legislature also compensates counties and school districts for manufacturing and windfarm property tax exemptions, “but doesn’t do the same for the disabled veterans’ exemption,” he noted.
“We were just a bit shy of 3,700 exemptions” claimed by totally disabled veterans in early November 2020, Richard said. That placed Comanche County second among the state’s 77 counties, he said, “just a little behind Oklahoma County,” which had 4,121 disabled veterans last year, according to the Oklahoma County Assessor’s Office.
Oklahoma County has “10 times our population and 11 times the property valuation that we have,” Richard added.
The total net assessed valuation of all property in Comanche County as of June 2020 was $706,298,362, according to the office of County Assessor Grant Edwards. The total net assessed valuation of Oklahoma County’s locally valued property as of last June was $7.92 billion, the County Assessor’s website indicates.
Approximately 19,000 military veterans live in Comanche County – home of the Fort Sill Army post – records indicate. Most of those individuals “have some degree of disability,” said Richard, former owner of Cache Road Liquors in Lawton. He himself is 40% disabled (hearing loss) from serving with the 1st Infantry Division (“the Big Red 1”) during the Vietnam War.
LEGISLATION ADDRESSING TAX EXEMPTION DIED ON THE VINE
Three pieces of legislation to address the disabled veterans tax exemption were introduced over the last two years, but none made it out of the house of origin.
Senate Bill 657 by Sen. John Michael Montgomery, R-Lawton, would have allowed funds from the state’s Ad Valorem Reimbursement fund to compensate counties for their tax losses from the disabled veterans’ property tax exemption. That measure was referred to the Senate’s Finance Committee and to the Appropriations Committee; the bill died on the vine in 2019.
A similar proposal, House Bill 2297 by Rep. Trey Caldwell, R-Lawton, would have augmented the Ad Valorem Reimbursement Fund with $3.85 million in state personal and corporate income-tax receipts. HB 2297 received a “do pass” recommendation from the House Appropriations and Budget Committee but never received a hearing on the House floor before the Legislature adjourned last May.
Senate Bill 1305 by Montgomery modified the proposal by providing that compensation from the Ad Valorem Reimbursement Fund would be limited to counties where the number of exemptions granted to totally disabled veterans exceeds 0.8% of the county’s population.
SB 1305 never received a hearing before the Legislature adjourned last year.
Nevertheless, Montgomery has resubmitted that proposal this year as Senate Bill 243. It will be considered when the Legislature convenes in earnest at noon on February 1.
In addition to the property tax exemption, totally disabled veterans who were honorably discharged from the military also receive a sales tax exemption that saved them an estimated $45.54 million last year, according to the Oklahoma Tax Commission.