Analysis: Colorado judges continue to erode taxpayer rights

Analysis: Colorado judges continue to erode taxpayer rights

Colorado Supreme Courtroom in the Ralph L. Carr Colorado Judicial Center

Nagel Photography |

Over the last 25 years, the Colorado courts have consistently legislated from the bench to weaken the state’s Taxpayer Bill of Rights (TABOR), two prominent advocacy groups committed to limited government assert. A recent Colorado Supreme Court ruling is one among many that “weakened taxpayer’s rights,” they argue.

Voters approved TABOR on Nov. 3, 1992, which then became part of the state constitution after the governor issued a proclamation on Jan. 14, 1993.

TABOR requires voter approval of most tax and debt increases. It also requires each government to reserve a percentage of non-debt-service spending (an amount that has fluctuated) for emergency reserves. It states that TABOR “shall reasonably restrain most of the growth of government. All provisions are self-executing and severable and supersede conflicting state constitutional, state statutory, charter, or other state or local provisions.”

In his book, “The Colorado Taxpayer’s Bill of Rights,” Rob Natelson, senior fellow in constitutional jurisprudence at the Independence Institute, points to numerous court rulings that weakened the provisions of TABOR, essentially demoting if from a constitutional bill of rights to “merely a set of administrative limits.” In the book, Natelson outlines the history before and after TABOR’s adoption, explains court cases and rulings, clarifies entities affected by TABOR, expounds on the principles of limited government and the reasoning made by unelected judges to redefine terms associated with “taxes.”

In the most recent battle, TABOR Foundation v. Regional Transportation District, the foundation argued that a law standardizing sales tax exemptions should have been presented to the voters on a ballot to reject or approve. Likewise, they argued the new law is not revenue-neutral but is really what TABOR defines as a “tax revenue gain.” The State Supreme Court rejected the foundation’s argument.

The justices ruled that the law did not fit TABOR’s definition of a “new tax” or a “tax policy change directly causing a net tax revenue gain.” Instead, they said the law’s intent was “to simplify tax collection and ease administrative burdens.” They rejected the notion that a percentage increase of .6 percent or $3 million was a “tax policy change” because the amount was so small. The judges argued that the law “only incidentally [increased] … tax revenues by a de minimis amount.”

By doing so, TABOR Foundation Chairman and former state legislator Penn Pfiffner told, the Supreme Court “reached into the constitution to find a de minimis argument that does not exist in TABOR. They legislated from the bench to add such a provision.”

Natelson argues that the court was “certainly wrong” and outlined four “crucial flaws in the court’s reasoning” in a column published by The Hill newspaper. He wrote: “A change in tax base is, in fact, a classic example of a tax policy change.” And, the law “unarguably increased tax levies.”

Natelson told “Voters adopt financial restrictions on their legislatures to keep their states free, prosperous and solvent. Unfortunately, state courts often do not understand the importance of such measures, and frequently weaken or even overturn them.

“That’s what the Colorado Supreme Court did in this case. Colorado’s state constitution clearly provides that if the legislature adopts a ‘tax policy change’ that raises taxes, Coloradans have a right to vote on it. In this case, the state legislature raised sales taxes by ending certain exemptions. But the court refused to require a public vote, and thus denied citizens ‘a say in what they pay.’ Regrettably, this is only the latest in a long line of cases where the Colorado courts have refused to protect this valuable constitutional right.”

Both Natelson and the TABOR Foundation point out there were other options the legislature could have pursued that would have been constitutional.

“If the law was such a good idea, why not bring it to the voters and let them decide?” Pfiffner asked.

Natelson warns in his book that “the rights of citizens to vote on certain hikes in government spending, taxes, and debt” are being diminished. “Unfortunately, each anti-TABOR court decision has become precedent for further anti-TABOR decisions. The Colorado courts are bootstrapping themselves toward ultimate destruction of Coloradans’ right to keep their state fiscally safe.”

And it’s not just the state legislature that is circumventing TABOR, Pfiffner argues. Rather than allowing citizens to vote on debt as required to issue bonds, local governments such as municipalities are renaming bonds as “certificates of participation” in order to avoid voting on them altogether. Another common abuse by the state government and local districts is to define new taxes as “fees,” which then allow those governments to avoid the required TABOR voter approval for tax increases, advocates who support limited government argue.

Another challenge facing TABOR is the judicial process itself, Pfiffner notes.

“The Courts at all levels have acted to weaken the Taxpayer’s Bill of Rights over and over again,” he said. “It does not help that in Colorado, judges are appointed through a progressive/Left process in which experts select nominees and so the process avoids legislative advise and consent.”


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