TABOR may force Colorado to refund excess marijuana money to taxpayers


DENVER — Tax revenues from Colorado’s new recreational marijuana industry are pouring into state coffers — and that’s actually a bit of a problem for lawmakers.

Taxpayers, however, may stand to benefit if lawmakers decide to refund the tax revenue that comes in above last year’s $67 million first-year estimate.

According to a legal analysis conducted by the state and obtained by FOX31 Denver, the marijuana revenues are subject to the state’s Taxpayer Bill of Rights (TABOR), which will require lawmakers to take action if tax revenues from the new legal marijuana industry exceed the estimated $67 million in annual revenue that was anticipated in the 2013 Blue Book analysis of Proposition AA, the new sales and excise tax rates voters approved in November.

The legal memorandum from the Office of Legislative Legal Services was sent to members of the Joint Budget Committee Monday night.

The report, obtained by FOX31 Denver, is the result of more than a week of legal analysis aimed at providing some certainty to the unanswered question of what happens if revenues come in above that $67 million estimate.

The most current Dept. of Revenue estimate forecasts that the state will take in $107 million, exceeding the Blue Book estimate by some $40 million.

The conclusion: the state must lower the tax rate and either refund the excess amount of revenues above the $67 million estimate or refer a measure to the November 2014 or 2015 ballot seeking permission from voters to let the state keep and spend all of the tax revenue from recreational marijuana.

“It’s very difficult to figure out what the actual amount of marijuana tax revenue is going to be,” said JBC Chairwoman Crisanta Duran, D-Denver, who notes that the state will update its revenue forecast,including marijuana tax revenue projections, on March 18.

“Ultimately, one way or another, the people of this state are going to have a great say about how this extra money is spent. We have to follow TABOR and either take the decision back to the people of Colorado and ask them to keep these dollars or we have to make a refund.”

Rep. Cheri Gerou, R-Evergreen, also sits on the JBC but, unlike Duran, doesn’t see a referred measure to the November ballot as a real option.

“I think probably what’s going to happen is that, internally, the state will try and take care of it,” Gerou said. “I think it’s going to be a bit of a black eye if we have to go back to the voters with another amendment. Continue reading

Mar 12

High court may review TABOR law

Justice Kennedy would be seen as swing vote in case

Gov. John Hickenlooper has to decide whether to go to the Supreme Court to defend the Taxpayer’s Bill of Rights, a law that many of his fellow Democrats would like to overturn.



The Denver-based 10th Circuit Court of Appeals ruled Friday that a lawsuit against TABOR can proceed. Attorney General John Suthers had argued that the lawsuit is a political question that the courts have no business deciding.

The state has the option to appeal to the U.S. Supreme Court or to the full 10th Circuit Court of Appeals. A three-judge appeals court panel handed down Friday’s ruling.

“We are currently reviewing the ruling and will then discuss the matter with our client before taking any next steps,” said Suthers’ spokeswoman, Carolyn Tyler.

Colorado voters adopted TABOR in 1992, stripping the power to raise taxes away from the Legislature. The lawsuit claims that TABOR violates the U.S. Constitution’s guarantee to every state of a “republican form of government,” where an elected body of representatives makes the laws.

Legal arguments in the case harkened back to the earliest days of the United States government, with arguments about what the framers of the Constitution would make of Colorado’s law.

No other state has an anti-tax law as strong as Colorado, and the case has attracted national attention. TABOR has been on the ballot in five other states, and 20 state legislatures have considered it, but it has always been rejected, said Nicholas Johnson, vice president of tax policy for the Center on Budget and Policy Priorities in Washington, D.C. The group was happy with Friday’s ruling.

“It’s important because legislatures need this authority. TABOR seeks to emasculate the Legislature,” Johnson said.

Richard Westfall, a leading Republican lawyer in Denver, filed a brief in defense of TABOR and argued that overturning it would open a “Pandora’s box” that could lead to similar challenges around the country.

But Mike Feeley, who argued the case for the plaintiffs, thinks Westfall is overstating the case. Continue reading

Mar 11

House Minority Leader DelGrosso’s Statement on TABOR Ruling

Denver –Today, following the 10th Circuit Court of Appeals’ ruling on a lawsuit challenging the constitutionality of the Colorado Taxpayer Bill of Rights(TABOR), House Minority Leader Brian DelGrosso (R-Loveland) issued the following statement:

“The Taxpayer Bill of Rights, particularly the requirement that voters’ approve all tax increases, provides vital protection to Coloradans from the tax-and-spend Democrats’ dream of unlimited spending,” said DelGrosso. “It’s unfortunate that the lawsuit will continue, but I am not surprised these Democrats, which include House Democrat leadership, want to overturn TABOR. They believe they know what’s better for you than you do and without TABOR’s protection will be able to raise your taxes without your consent.”

Mar 10

Federal Appeals Court rules Colorado Anti-TABOR lawsuit can proceed

Published March 7, 2014 | By CTBC Director

A three-judge panel on the Federal 10th Circuit Court of Appeals ruled Friday that a lawsuit challenging the Taxpayer’s Bill of Rights (TABOR) amendment to the Colorado Constitution may proceed, and remanded the case to federal district court to proceed to trial on the merits.

Byron White Courthouse 10th Circuit Denver

The appeals court ruling addressed only the issue of whether the plaintiffs (33 “educators” and legislators who are “mostly Democrats” with a few token “Republicans”) have legal standing to sue, and whether the lawsuit is barred by the “political question” doctrine, and explicitly did not address the merits (or lack thereof; the case has been widely derided as frivolous and groundless) of the lawsuit:

The merits of the case are not before us. We express no view on the substantive issues and intend none. We consider solely standing and the political question doctrine.  (Ruling at 6)

Establishing standing to sue requires, first and foremost, that the plaintiff “has suffered a concrete and particular injury in fact that is either actual or imminent” – which the court affirmed for the plaintiffs who are current or former legislators, since

Legislator-plaintiffs contend they have been injured because they are denied the authority to legislate with respect to tax and spending increases. (Ruling at 21)

The more significant element of the appeals court ruling addresses the “political question” doctrine – the issue of whether the claims brought by the lawsuit may properly be addressed by the courts at all.

 As a threshold matter, we must decide if the political question doctrine categorically precludesGuarantee Clause challenges against state constitutional amendments adopted by popular vote. (Ruling at 29)

The appeals court concluded that guiding U.S. Supreme Court precedent Continue reading

Mar 09

Appeals Court Allows Suit Against TABOR

March 7, 2014 3:35 PM

(credit: CBS)

(credit: CBS)

DENVER (AP) – State lawmakers opposed to Colorado’s landmark Taxpayer Bill of Rights won another legal victory Friday as the 10th U.S. Circuit Court of Appeals ruled their lawsuit challenging the law can proceed.

The tax limitation law passed by voters in 1992, known as TABOR, requires all tax increases to be approved by voters. The lawmakers argue that deprives them of the right to have a say in tax policy, denying Colorado a republican form of government promised by the U.S. Constitution.

A three-judge panel from the appellate court concluded that the lawmakers have proven they have been injured by the law and the lawsuit should proceed. They didn’t rule on the merits of the case, which will continue in federal court unless Attorney General John Suthers appeals.

“We consider solely standing and the political question doctrine: whether these plaintiffs have suffered a particularized injury not widely shared by the general populace that entitles them to have their case heard by the federal courts, and whether the question presented is purely political in nature and should not be reached by the courts,” the ruling said.

State attorneys argued that the mostly Democratic lawmakers challenging the law didn’t have the right to sue because they were not harmed by the law. Continue reading

Feb 07

TABOR Foundation files appeal in Colorado Bridge Enterprise lawsuit

Guest Columns



There have been violations of basic common sense and principles of good government,” said TABOR Foundation Chairman Penn Pfiffner. “The concept and construct of this dishonest and devious scheme must not stand.”

A Colorado organization has filed an appeal to overturn a Denver District Court finding about the Taxpayer’s Bill of Rights (TABOR). The TABOR Foundation, whose mission includes protecting the constitutional amendment that was initiated by the people, believes the trial court erred in finding that the State of Colorado’s Bridge Enterprise conforms to TABOR.

In 2010, the legislature created the Colorado Bridge Enterprise to repair and maintain bridges. The CBE was called an “enterprise” so it could issue debt without a vote of the people, as is otherwise required by TABOR. The CBE already has issued $300 million in debt and plans more. An enterprise is a government-owned, self-supporting business, which is exempt from TABOR restrictions. The legislature also authorized the CBE to impose a new charge on vehicle registrations. The charge, known as the bridge safety surcharge, was designated for repair and maintenance of state owned bridges. But the CBE had a problem — because the charge is not a fee for service, it looked like a tax that would require a vote of the people. Disinclined to allow Colorado’s Constitution to stand in the way, the CBE called it a fee and hoped the label alone would be enough to avoid a vote of the people.

In May 2012, the TABOR Foundation sued to reverse the tax and stop the issuance of more debt (the CBE plans to sell up to $1 billion in bond debt). The arguments presented in the lawsuit fall into two categories: that the fee is actually a tax, and that the CBE is not a qualified enterprise and cannot issue debt without a vote of the citizens of Colorado.

If the bridge surcharge survives the legal challenge, the courts will have established a method by which government can fund most anything by creating enterprises, assessing fees and issuing debt. They will have found a method to strip Coloradans of their constitutionally protected rights under TABOR. Continue reading

Dec 07

Tweaking TABOR to free up funds for rebuilding after emergencies

By Alicia Caldwell

The Denver Post
The way Sam Mamet sees it, the Taxpayer’s Bill of Rights is its own disaster for communities trying to rebuild after an emergency.

The executive director of the Colorado Municipal League said TABOR imposes unreasonable restrictions on local governments as they try to replace important government infrastructure, such as water and sewage treatment plants.

Mamet, who discussed the issue on a segment of The Roundup, a public affairs discussion conducted by members of the Denver Post editorial board, said some tweaks to TABOR are needed.

He emphasized that the proposal would not involve a major rewrite of the constitutional amendment, but rather a few targeted changes, such as defining an “emergency,” and making clear that grants received by communities trying to rebuild would not count toward their TABOR-defined spending limits.

Mamet called the changes “surgical.”

Read more: Tweaking TABOR to free up funds for rebuilding after emergencies – The Denver Post 
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Dec 01

Should TABOR be dismantled? No

Voters have right to decide state, local taxes

By John Suthers

Two supporters of Amendment 66 look at projected figures showing the initiative
Two supporters of Amendment 66 look at projected figures showing the initiative’s defeat and the victory of Proposition AA (a tax on recreational marijuana sales). (Ed Andrieski, The Associated Press)

Former Congressman David Skaggs and former state Sen. Mike Feeley have filed a lawsuit contending that it’s a violation of your federal constitutional rights to allow you to vote on whether or not to raise your state and local taxes. Because taxpayers and not legislators have the final say on tax increases, they think we have “too much democracy” in Colorado.

I’m confident the courts will ultimately conclude otherwise.

Reasonable people can and do disagree about the wisdom of the Taxpayer’s Bill of Rights (TABOR). And many Coloradans, including myself, believe it’s far too easy to amend our state constitution. But there’s nothing unconstitutional about allowing voters to decide important issues, including whether to raise their taxes.

The plaintiffs claim that letting citizens decide whether taxes are raised violates the “Guarantee Clause” of the U.S. Constitution. In the Guarantee Clause, the United States guarantees each state will have a “republican form of government.” It was intended by our founders to suppress any lingering monarchical tendencies in the original states. They wanted to ensure that Virginians couldn’t make George Washington or Thomas Jefferson a king of their commonwealth, even if they wanted to. The constitutional provision was intended to preserve power to the people, not take it from them. Continue reading