Committee backs plan to raise disabled-veteran homestead exclusion; proponents say current caps lag inflation

Saint Paul — The House Veterans and Military Affairs Division on Feb. 12 recommended that House File 194, a bill to increase valuation caps in Minnesota’s disabled-veteran homestead property tax exclusion, be sent to the taxes committee following testimony from veterans and advocates.

Lede: Representative John Knudson, sponsor of HF194, said the bill would raise the exclusion amounts for qualifying disabled veterans, describing the change as necessary because the current $300,000 and $150,000 caps have not been updated since 2008.

Nut graf: Supporters told the committee that rising home values and stagnant statutory exclusion caps have reduced the benefit’s real value to veterans and surviving spouses, sometimes leaving low-income households at risk of losing homes when benefits and VA payments decline.

Key points - Current program: HF194 targets Minnesota’s disabled-veteran homestead property tax exclusion, which reduces a home’s taxable value for veterans certified by the U.S. Department of Veterans Affairs as having a service-connected disability. Testimony noted the exclusion amounts have not changed since the exemption’s enactment in 2008. - Proposal: HF194 would raise the exclusion for veterans rated 100% and permanently disabled to $400,000 and increase the 70% disability-rating exclusion to $200,000. Representative Knudson described the change as an update to align the exclusion with housing-cost realities. - CPI comparison: Testimony presented an inflation comparison showing $300,000 in 2008 has the purchasing power equivalent of about $439,759 today and $150,000 then equates to roughly $219,880 today, figures committee members were given by nonpartisan research and witnesses.

Witnesses and committee discussion - Trent Dilkes, legislative director for Disabled American Veterans Department of Minnesota, said calls about this issue have increased and that surviving spouses are especially vulnerable when VA survivor benefits decline; he urged indexing or a larger statutory increase so the benefit does not become obsolete. - Guy Singh, a county veterans service officer in Olmsted County, described local impact: he said Olmsted’s median home value is about $327,000 and about 607 local veterans or surviving spouses currently use the exclusion. - Brett Sample, who describes himself as executive director of Forgotten Heroes Ranges and Retreat and an Aitkin County commissioner, said some households bought homes decades ago and now face much larger property-tax bills because values rose while the exclusion did not.

Votes and procedure - Representative Matt Bliss moved that HF194 be recommended to be re-referred to the taxes committee. The Division voted “aye” on the motion; the motion carried and HF194 was re-referred to the taxes committee. The committee did not record a roll-call vote.

Clarifications requested and next steps - Dilkes said his office is compiling county-by-county fiscal calculations and will share an analysis with committee staff showing which properties and counties would be affected. He also asked the committee to consider technical clarifications in the statute (for example, removing redundant references to “honorable” service where VA disability ratings already imply required service characterization).

Ending: The committee advanced HF194 to the taxes committee for further fiscal review and possible amendment.