CLARKSVILLE, Tenn. (WTVF) — As a small token of gratitude, Tennessee gives fully disabled veterans a break on their local property taxes.
In 2023, close to 43,000 disabled veterans and their spouses were reimbursed.
But it's recently come to light that the property tax relief program is running out of money.
The yearly budget for the next decade is roughly $41 million, but in the last two years, spending surpassed that, which forced the comptroller to dip into reserves. For 2025, the state needed $47.3 million, but the program was only funded $41.2 million.
The money for the program comes from the general fund, not something like a tax. In addition to 100% disabled veterans, low-income elderly, and people with disabilities are eligible.
Since I first reported on this, I've heard from several veterans.
Tennessee Veterans, an organization that represents roughly 50,000 local veterans in 12 veteran organizations, contacted me to say the governor's office knew last year that the program was running out of money.
"They knew it last year. They knew they had to address it, and the can has been kicked on down the road," said Bill Summers, an Air Force veteran and board member at Tennessee Veterans.
The governor's proposed budget this year disappointed them. More money was not appropriated to the property tax relief program.
"Usually, if the governor will input money to his budget submission it makes the fight a whole lot easier with the legislature. If they know the funding is there, it goes a whole lot smoother," Summers said.
Tennessee Veterans says Tennessee can't afford to let this slide. Other states are working to attract veterans with similar, but bigger property tax-exempt programs for disabled vets.
The Kentucky legislature is considering a new property tax homestead exemption for any disabled veteran. It would provide tax relief based on the severity of their service-connected disability rating. Veterans with a 10-100% disability rating would receive exemptions ranging from $5,000 to 100% of their property's assessed value, with the maximum exemption available for veterans with a 100% disability rating. For those with a 100% disability rating, the exemption would increase annually from $240,000 in 2026 to $400,000 in 2030 and beyond.
"Some of the other states that understand that vets are a resource and an asset, especially for business and employment opportunities, are offering incentives to get veterans to move," said Steve Singleton, a Navy veteran and board member at Tennessee Veterans.
Additionally, the group is pushing for a simpler way to calculate reimbursements, one that is not tied to changing market values.
"We see a lot of advertisements saying 100% disabled veterans get $175,000 tax exemption, but that's only in the year the assessment is done. It drops down every year after that," Singleton explained.
Summers says, the way it's set up now, disabled veterans in booming communities are penalized.
"If we're going to compete with other states and not penalize veterans, we've got to fix the market value calculation. Not every county grows at the same rate, so what happens is veterans will move into the state, and one county may only see a 5-10% increase, meaning their decreasing share is much smaller. However, for someone who moves to Nashville, Clarksville, or Memphis, that change is more noticeable," Summers said.
In 2023, close to 43,000 disabled veterans and their spouses received $27 million in tax relief. Last year, it was more than $30 million. According to the comptroller's office, that number is projected to grow by 12% each year for the next decade.
Do you have more information about this story? You can email me at hannah.mcdonald@newschannel5.com.
Fundraising efforts are underway in Brownsville and Nutbush, TN to build a statue for a major superstar who was raised there, Anna Mae Bullock. You probably know her by her stage name, Tina Turner. I was a huge fan of Tina and glad to see efforts are underway to showcase more of her ties to West Tennessee.
-Lelan Statom
