VANDE KROL: BRIDGES OVER LEGALLY TROUBLED WATERS
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.
Unfortunately, Denver District Judge Michael Martinez ruled in favor of the CBE. The TABOR Foundation appealed the decision and filed its opening brief on Jan. 21, 2014.
In the appeal, Mountain States Legal Foundation Staff Attorney Jim Manley, representing the TABOR Foundation, clearly refutes the trial court’s conclusions. Citing ample case law and laying out the common sense and logic of the arguments, Manley presented an appeal that should be difficult to deny.
An example of Manley’s arguments was his refutation of the judge’s rejection of the value of bridges CDOT granted to the CBE. In Colorado, an enterprise cannot receive more than 10 percent of its funding from state government grants. But the state government gave CBE 56 bridges, and valued 54 of them at zero dollars, specifically to maintain status as an enterprise. The TABOR Foundation presented an expert who gave credible testimony that the bridges alone exceeded the 10 percent rule. Judge Martinez excluded his testimony in part because he “failed to take into consideration such obvious factors as heavier weekend traffic” in evaluating the bridges. But, as Manley points out in the appeal, more traffic increases the value of the bridges. Such a simple economic concept was completely missed by Martinez.
In another argument, Manley demonstrated that the district court’s decision would cause an “absurd result” (which violates case law, as well as common sense). Martinez ruled that the bridge surcharge is a fee because it is collected for a specific purpose. Manley points out that, using this illogic, any tax could be called a fee by declaring its specific purpose. For example, school property taxes would become “school fees.”
Martinez erred in several other ways, and Manley’s appeal lays out a very strong case for the appeals court to reverse Martinez. Taken together, the appeal should win the day for TABOR and for the rights of Colorado taxpayers.
Brian Vande Krol is a director of the TABOR Foundation. He is a small business owner and taxpayer from Westminster. He ran for the State House in 2010 and 2012. Brian is also the secretary of the Colorado Republican Business Coalition and director of the North Suburban Republican Forum.