When the 7th Circuit Court of Appeals on Sept. 4 affirmed Indiana’s marriage law was unconstitutional, Judge Richard Posner’s opinion gave special nod to the economic harm married same-sex couples suffer by not receiving the tangible state and federal benefits that are extended to married opposite-sex couples.
The debate over same-sex marriage often focuses on the emotional and intangible toll gays and lesbians and their children suffer by being denied the same rights as married opposite-sex couples.
But as the lawsuits challenging Indiana’s prohibition against same-sex marriage point out, gays and lesbians lose monetary benefits because their marriages are not recognized by the state. The fiscal impact is unfair the plaintiffs argued. Posner agreed.
“The state treats married homosexuals as would-be ‘free riders’ on heterosexual marriage, unreasonably reaping benefits intended by the state for fertile couples,” Posner wrote in the decision. “But infertile couples are free riders too. Why are they allowed to reap the benefits accorded to marriages of fertile couples and homosexuals are not?”
Posner listed the tangible fiscal harms which directly and indirectly affect the children of same-sex parents. These harms include families of public safety officers killed in the line of duty not being able to receive death benefits, and survivors whose spouses die intestate have no right to inheritance. In addition, custodial rights to children and child support obligations do not apply to same-sex couples.
Hoosier Nichole Webb, who is not part of the marriage lawsuits, said she does not have the stomach to calculate how much more her mortgage will cost simply because she married a woman.
The Bedford nurse joined the U.S. Army when she was 18 years old, trained as a medic and then served in the first Gulf War, treating soldiers at a field hospital. This summer, she and her wife had hoped to take advantage of her service by using a Veterans Administration Home Loan to buy their house. Since Indiana does not recognize their same-sex marriage, the VA could not count her spouse’s income toward the loan, which prevented the couple from qualifying.
They instead had to get a traditional mortgage and now have to pay, by Webb’s estimate, thousands and thousands of dollars in mortgage insurance and interest over the life of the loan.
“When you join the military and get sent overseas into a war zone and risk your life, you never anticipate that because you live in Indiana you’re not going to get a VA loan,” Webb said.
In the marriage lawsuit filed by first responders, Lee, et al. v. Pence, et al., the state pension fund restrictions are the “meat and bones” of the challenge, said attorney Karen Celestino-Horseman, who is on the legal team representing the plaintiffs in the case.
The lead plaintiff in the American Civil Liberties Union of Indiana’s lawsuit against the state’s marriage law, Midori Fujii, et al. v. Commissioner of the Indiana State Department of Health, et al., was penalized financially when her wife died in 2011 and left the estate to her. Midori Fujii had to pay more than $300,000 in inheritance tax on the property, a tax she would not have had to pay if her spouse had been of the opposite sex.
Like Posner, Celestino-Horseman derided the state’s responsible procreation argument as the basis for not recognizing same-sex marriage.
“How does denying spousal disability benefits protect unintended children,” Celestino-Horseman asked. “It doesn’t. How does denying tuition assistance to spouses protect unintended children? It doesn’t. How does denying health care benefits to same-sex families protect unintended children? It doesn’t.”
Attorneys and accountants say putting an exact dollar figure on the cost to same-sex couples is difficult because circumstances differ between families. However, several pointed to income tax as an example of how same-sex couples are treated unfairly.
Although the Internal Revenue Service allows legally married same-sex couples to file a joint federal income tax return, these same couples in Indiana have to file as single individuals to the state Department of Revenue.
The headache of figuring out how to divide the marital property and who will claim any children for the single returns is compounded because Indiana calculates the taxable income based on the federal adjusted gross income rate. So same-sex couples have to prepare individual federal returns in order to be able to complete the state’s individual returns.
The end result: Same-sex couples in Indiana have to prepare five tax returns.
The couples who married during the three days after a federal judge overturned Indiana’s ban on same-sex marriage are now in limbo as to whether they will need to file joint or individual federal returns because the U.S. Department of Justice, so far, has not recognized their marriages.
Crystal Allen, CPA and owner of A Total Solution CPA & Consulting in Indianapolis, said in addition to hindering her clients’ ability to plan, the situation is a burden on their families and stressful on their personal well-being.
“It’s definitely not something that’s fair,” Allen said.
If Indiana had allowed state pension benefits to be extended to same-sex spouses, retired Battalion Chief Ruth Morrison said she would not have joined the Lee lawsuit. The firefighter found out from a phone call after she retired that if she died, her wife would not receive her pension.
Morrison is not looking for special treatment. She wants the money she earned and paid into the retirement fund to benefit her family the same as it would the family of an opposite-sex couple.
“We all do the same job and make the same sacrifices,” Morrison said, “Treat our families as you would any other family.”
Also same-sex couples incur additional costs to obtain power of attorney and legal standing to make medical decisions for their spouses. Still, as attorney Barbara Baird, one of the attorneys representing the plaintiffs in Baskin, et al. v. Bogan, et al., noted, these documents are not guarantees.
Baird pointed to the 2007 tragedy in Florida where a hospital denied Janice Langbehn the ability to visit her partner Lisa Marie Pond after Pond suffered a debilitating and ultimately life-ending stroke. Langbehn had legal documents giving her access but the hospital ignored them.•