Colorado Court Grants Taxpayers’ Motion as to Healthcare Tax
DENVER – Transportation funding in Senate Bill 17-267, that was billed as the “Sustainability of Rural Colorado” Act, may in fact filter to more-populated areas if a newly-formed association made up of like-minded county commissioners has anything to say about it.
SB 267 was rushed through with more than 70 pages of strike below in the waning moments of the 2017 legislative session. It was billed as the “Grand Deal” by its supporters and the “Grand Betrayal” by its detractors.
There is no doubt it was controversial throughout the process because it involved reclassifying the Hospital Provider Fee from a Taxpayer’s Bill of Rights (TABOR) governed account to an enterprise, non-TABOR restricted account. It also put into use Certificates of Participation (COPs), which some believe are an end around TABOR. Some also believed it violated Colorado’s single-subject law for new legislation.
Since it was signed into law and took effect July 1, Complete Colorado broke the news that a drafting error would cost special taxing districts such as the Regional Transportation District (RTD) and the Scientific and Cultural Facilities District (SCFD), which funds the Denver Zoo and the Denver Museum of Nature and Science, millions in revenue.
Complete Colorado has also learned that an organized group of county commissioners called Counties and Communities Acting Together (CCAT) see the new law as a stepping stone to further weaken TABOR.
Is it a “tax” or “fee”?
You be the judge.
The Court held that the IRS could not charge “fees” for a thing with no value to the “tax”payer.
The judicial branch exists primarily to ensure that Constitutional principles are properly upheld by the courts. And yet, constitutional victories have been troublingly rare as of late. But even though limited government and a true separation of powers seems almost non-existent, the United States District Court for the District of Columbia just handed down a precedent-setting decision that is a win for anyone who supports constitutional limits to state power.
In the class action suit of Steele v. United States, the Court ruled that the IRS would be required to return an estimated $270 million in “user fees” charged to Americans in what a U.S. District Court determined was an unlawful expansion of the agency’s authority.
The Court ruled that occupational licensing was outside the IRS’ scope of authority.
In 2010, the Treasury Department and the IRS issued a tangle of new regulations, including a requirement that tax preparers register for a specific ID number (PTIN) to be entered on all returns. For anyone who had previously been preparing tax returns for others without a state-sanctioned “professional” preparer’s status, this new regulation required them to pass a competency exam before receiving the required PTIN.
|FOR IMMEDIATE RELEASE
Contact: William Perry Pendley, 303/292-2021, Ext. 30
Healthcare “Enterprise” is Unconstitutional, says Taxpayer Group
June 30, 2017 – DENVER, CO. A Colorado group that defends the rights of taxpayers today filed a motion to amend and supplement its complaint against two Colorado entities and their officials for violation of the Colorado Constitution’s Taxpayer’s Bill of Rights (TABOR). On June 26, 2015, the TABOR Foundation alleges in Denver County Court that its members should have been allowed to vote on whether a “hospital provider fee” could be imposed on Colorado hospitals, which since its enactment in 2009, allowed Colorado’s Department of Health Care Policy and Financing to collect tens of millions and perhaps even a hundred million dollars. Although federal law lets States impose healthcare assessments to pay for Medicaid services, the regulations provide for “taxes” and not “fees” as Colorado calls them to avoid TABOR. Also, although the 2009 act provided that the funds collected would be kept separate from the general fund, in fiscal years 2010, 2011, 2012, and 2013 some of the tax proceeds were put in the general fund. The Foundation sought declaratory and injunctive relief and refund of revenues collected, with the payment of interest, as required by TABOR. As of October 16, 2015, a motion by the Colorado defendants to dismiss the lawsuit had been briefed fully. On May 30, 2017, Governor Hickenlooper signed into law S.B. 17-267, which created the Colorado Healthcare Affordability and Sustainability Enterprise to administer the Hospital Provider Charge beginning on July 1, 2017; however, except for the insertion of the Enterprise in this purportedly unconstitutional endeavor, all of the Foundation’s 2015 claims for relief remain virtually identical.
June 22, 2017 9:58 AM· By Brian Vande Krol
Little ole Colorado, you’ve done well for yourself. You were a collection of cow towns when I first moved here in 1988. It was said that yogurt was the only culture in Colorado, and cowboys don’t eat yogurt.
Colorado is wealthy. Not DC wealthy, but quite a step up from the late 80’s. We rank 11th for median household income, have the 10th lowest unemployment rate, and the 14th lowest poverty rate. We have the Denver Performing Arts Center, and a growing system of subsidized trains. Colorado is also healthy, ranking 10th.
One reason we have done well is our restrained state government. With our balanced budget requirement and the Taxpayer’s Bill of Rights (TABOR), government has a tough time taking more of our money. That means greater economic growth.
But 70% of our state’s roads and bridges are in poor or mediocre condition, and getting worse. And, despite all that wealth and health, 1 in 4 Coloradans depend on the government for healthcare (Medicaid). The legislature wants more of your money, and is willing to close down hospitals to keep it.
The most cynical move of all
The legislature argued for several years about the Hospital Provider Fee, an $800 million program, claiming it is solely responsible for exceeding TABOR revenue limits, a situation that would require refunds to taxpayers. (Yes, it’s actually a tax. They just call it a fee so they don’t have to ask permission to take the money.) But every revenue source is equally to blame for exceeding the limit. To appease their insatiable appetite for more revenue, the legislature moved the program out of the general fund so it is not subject to the revenue limits. This is a crafty, deceptive scheme to avoid asking permission from voters to take more money, and to avoid refunding excess collections. They threatened to close rural hospitals if they didn’t get their way.
TABOR requires a change to the revenue limit if a program’s costs are moved off the books. It also requires TABOR to be interpreted to “reasonably restrain most the growth of government.” Instead of lowering the limit by $800 million, it was lowered only $200 million, resulting in a permanent $600 million per year tax increase. (The $800 million will still be spent, but outside of the budget, leaving more room in the budget, and more taxpayer dollars to be taken and spent.) Senate President Kevin Grantham (R, Canon City) believes that as long as there is a change, he has met the constitutional requirement. Continue reading
The Colorado Court of Appeals on Thursday sent a case back to a lower court that could leave future funding for state and local elections in jeopardy.
The case, filed by the National Federation of Independent Business, claims that businesses carry an unfair burden of the cost of funding state and county elections. The business group hopes to reclaim the revenue, which would potentially throw elections into flux.
The appellate decision is not immediate cause for concern for state officials, as the court is only requiring the lower court to gather more information before making a decision.
“We reverse the summary judgment and remand to the district court with directions to hold further proceedings to determine whether the Business and Licensing charges have been adjusted or increased since the passage of TABOR in 1992, so as to require voter approval for the adjustments,” the Court of Appeals wrote in its decision.
“Depending on the court’s determination, it may need to reach the issue as to whether the Business and Licensing charges constitute a tax or a fee.”
That last statement by the court represents the heart of the case and what could cast uncertainty over elections in Colorado. More broadly, it could throw a curveball to all state departments that are funded by fees.
The question is whether business filings collected by the department qualify as a “fee” or a “tax.”
Kristi Hargrove voted for Donald Trump in the last election. From Crested Butte, which she calls a liberal town, she identifies as a proud Republican.
“My daughter came home from school, she was in middle school, complaining about how cold she was at school,” Hargrove said. It was around 2003. “I said to her, well wear more clothes, because you never put on enough clothes.”
However, when Hargrove went to work on a student directory for her P.T.A., she had trouble because her fingers were freezing. After confronting the principle, she found out the school had turned down the utilities.
“We live in a fairly affluent area and I thought that was ridiculous,” she said. “My comment to her was, ‘who’s wasting money?’” Continue reading
Two Colorado Republican lawmakers are delivering on their promise from earlier this year to fine-tune TABOR, a 25-year-old constitutional restriction on how much the state can receive — and spend — without triggering tax refunds.
Rep. Dan Thurlow and Sen. Larry Crowder have introduced House Bill 17-1187 that seeks to change the way annual revenue limits set by the 1992 Taxpayer’s Bill of Rights are calculated.
It’s a first step that could allow the state to keep millions of dollars for roads, education and other priorities, starting with an extra $175 million in the 2018-2019 fiscal year, according to legislative analysts.
Thurlow, of Grand Junction, and Crowder, of Alamosa, have asked: What’s the use of individual taxpayer refunds amounting to pocket change when, this year alone, lawmakers must close a $500 million gap to balance the budget that begins July 1?
“I believe our party is the party of solutions and this bill is an example of that,” Thurlow said Monday. Continue reading
The legal battle between an organization representing Colorado small businesses and the Secretary of State isn’t over, despite a Colorado Court of Appeals ruling this week.
The Colorado Court of Appeals this week said the business licensing charges collected by the Secretary of State and used to pay for all the activities run by the office are constitutional under that Taxpayer’s Bill of Rights (TABOR).
But the court ordered the case back to district court and instructed the Secretary of State to produce a list of all the business fee increases since 1992, when TABOR was enacted. Continue reading