Category Archives: Legal Issues

Aug 06

Colorado’s budget gap means more money in taxpayers’ pockets

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Colorado’s budget gap means more money in taxpayers’ pockets

Have Colorado lawmakers cried wolf about the state’s budget too many times? 

The state legislature, after recently reconciling a billion-dollar “budget shortfall” due mostly to a relentless overspending habit, is now back in the barber chair for yet another fiscal haircut.  

And while legislators are still overspending and overpromising, state revenue reductions from taxpayer-friendly policy changes in the recently passed One Big Beautiful Bill Act (OBBBA) are now in play as well. This means politicians have less to spend, while Colorado taxpayers keep more money in their own pockets.

Crying wolf

Beginning at the end of 2024, legislators began sounding the alarm over a $1.2 billion budget hole for fiscal year 2025-26.  

What was termed a “shortfall” was actually a combination of cooling inflation, the depletion of one-time COVID-19 relief funds, a slew of new special interest tax breaks, and ballooning healthcare costs, all running smack into Colorado’s constitutionally guaranteed taxpayer protections.  

State government was living beyond its means, but instead of facing reality, majority Democrats instead blamed the Taxpayer’s Bill of Rights (TABOR) and the wealthy not paying their fair share. 

Contrary to the doomsaying by legislators, the budget was quietly reconciled, and without any significant cuts to healthcare, K-12 education, and higher education (which alone account for over 70 percent of General Fund appropriations). 

Beyond that, the state budget, prior to passage of OBBBA, was actually expected to grow by over 3.5 percent, or nearly $1.5 billion, hardly a crisis by conventional standards. 

The One Big Beautiful Bill 

On July 30, legislative leadership met with analysts from the governor’s office and Legislative Council Staff to learn more about the impacts of the OBBBA on the state budget. 

Despite slightly different estimates, both groups of analysts agreed that a significant budget deficit would emerge this year, due to the immediate impacts of the OBBBA on state tax collection. 

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Jul 30

Colo. Conservative Group Says New OT Law Violates TABOR

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Colorado’s new overtime law, which requires overtime deducted from federal gross income to be added back to a taxpayer’s federal taxable income for state income tax, violates TABOR….

To read the rest of this story, please click (HERE) to go to Law360.

 

Jul 25

Governor sued over state’s plan to keep tax on overtime

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LEGISLATURE

Governor sued over state’s plan to keep tax on overtime
Policymakers grapple with the effects of GOP’s federal tax law
By Seth Klamann
sklamann@denverpost.com

A conservative advocacy group and a state senator sued Gov. Jared Polis and the head of Colorado’s tax agency Thursday, alleging that recent legislation requiring the continued taxing of overtime pay — in the face of federal changes — violates the state constitution.

The lawsuit, filed in Denver District Court, argues that House Bill 1296 violates the state’s Taxpayer’s Bill of Rights, or TABOR, which requires voter approval before the state can levy new taxes.

HB-1296, which Polis signed into law in May, requires the state to continue taxing overtime starting next year — and it was passed in anticipation of a provision in Congress’ tax law this month that temporarily will allow workers to deduct a large portion of overtime from their federal taxes.

Colorado’s law was drafted as federal debates about cutting taxes on overtime — a campaign promise by President Donald Trump — were developing. Now lawmakers are grappling with the potential for hundreds of millions of dollars in cuts to state funding resulting from the final tax bill.

The new lawsuit, which Democrats dismissed as a political stunt, was filed by Advance Colorado and Republican Sen. Barbara Kirkmeyer, as well as by a Fremont County commissioner, Kevin Grantham — a former Senate president — and two Coloradans who receive overtime pay.

Income declared on earners’ state tax return typically is influenced by what is on their federal tax forms. The lawsuit alleges that restarting the overtime taxation at the state level constitutes the creation of new revenue, which would require voter approval, and it asks a judge to invalidate the law.

The state legislation didn’t necessarily create a new tax, although it changed the collection mechanism to ensure that tax on overtime still was collected regardless of federal changes. Functionally, it continues a tax on overtime income that the federal government now allows to be deducted to a significant degree — up to $12,500 annually — for the next four years.

Michael Fields, the president of Advance Colorado, accused Democratic lawmakers of trying to sidestep TABOR and voter approval.

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May 19

What is TABOR: The Taxpayer’s Bill of Rights? – Advance Colorado Rundown

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Advance Colorado Executive Vice President Kristi Burton Brown gives a brief history and explanation of Colorado’s unique taxpayer protection: the Taxpayer’s Bill of Rights. This revenue cap limits the state government’s ability to spend taxpayer dollars and requires refunds to be sent to Coloradans when the government collects beyond the limit.

May 07

Legislators debate whether to sue over Taxpayer’s Bill Of Rights (TABOR)

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FNF Tax Form
Leon Dewiwje | Unsplash
(The Center Square) – Colorado lawmakers are scheduled in the final days of the legislative session to consider a joint resolution that would require the General Assembly to sue over the state Taxpayer’s Bill of Rights.

The joint resolution only has until Wednesday to pass, before the General Assembly adjourns sine die. It hasn’t moved in the chamber since April 10, when it was laid over.

TABOR is the constitutional amendment passed by voters in 1992 that requires voter approval for all tax increases. The amendment also limits state revenue growth to inflation plus the rate of population growth, with the intent of controlling state spending. TABOR also requires any revenue surplus to be refunded to taxpayers.

To finish reading this TABOR story, please click (HERE) to go to The Center Square.

 

May 06

Colorado Democrats fail to challenge TABOR as legislative session nears end

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Colorado Democrats fail to advance their resolution challenging the Taxpayer Bill of Rights before the legislative session ends Wednesday.

DENVER — A Democratic-led effort to challenge Colorado’s Taxpayer Bill of Rights (TABOR) will not advance before the legislative session ends Wednesday, despite the party’s complete control of state government.

State Rep. Sean Camacho, D-Denver, who sponsored a resolution to initiate a lawsuit seeking to have TABOR ruled unconstitutional, confirmed the measure will not receive a vote before midnight, ensuring the resolution will not have enough time to go through all the steps in the House and Senate by Wednesday.

“It is not happening,” Camacho said.

He did not know why it was not being put to a vote, and as of Monday night, a spokesman for House Speaker Julie McCluskie, D-Dillion, had not responded to an 12:35 p.m. text message regarding the vote.

TABOR, which has been state law since 1992, limits how much revenue Colorado can collect and spend each year. It also requires refunds to taxpayers when the state exceeds those limits. Democrats have increasingly cited TABOR as the reason behind this year’s $1 billion in state spending cuts.

To continue reading the rest of this story, click (HERE) to go to 9 News

May 03

Colorado Lawmakers Push to Sue Taxpayers — Using Taxpayer Money

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Colorado Lawmakers Push to Sue Taxpayers — Using Taxpayer Money

Colorado taxpayers and voters are on high alert after the introduction of House Joint Resolution HJR25-1023, sponsored by Democrat Representatives Sean Camacho and Lorena García and Democrat Senators. Lindsey Daugherty and Iman Jodeh. This resolution would initiate a taxpayer-funded lawsuit to challenge the constitutionality of the Taxpayer’s Bill of Rights (TABOR).  TABOR was a citizen-initiated, and Colorado voter-approved, constitutional measure in 1992 and has been protecting taxpayers for over thirty years. Republican Representatives and Senators have publicly and vigorously expressed opposition to the resolution.

Ironically, this legal attack, led by Democrat sponsors, would be paid for by the very people TABOR was designed to protect.

The sponsors argue that TABOR violates the U.S. Constitution’s guarantee of a “republican form of government” — claiming that only elected lawmakers should decide tax policy, not voters. But that argument flatly contradicts Colorado’s own history and the words of a former Democratic governor.

In August 1910, Governor John F. Shafroth called a special legislative session to enshrine the citizen right to initiative and referendum into the Colorado Constitution. His message to the General Assembly, reprinted in The Walsenburg World (Aug. 11, 1910), made the purpose clear:

“The law of the Initiative and Referendum places the government nearer to the people, and that has always been the aim of the framers of all republican forms of government.”

A Democrat said that. And yet in 2025, Democrats are sponsoring a resolution to sue the people for using those very rights.

Last Thursday, I hand-delivered that quote and the historical context to legislators — sliding it under many office doors in hopes it would be read without me there. In the chaos of the session’s final days, I can only hope some of them reflect on how far their party has drifted.

There are rumors the sponsors might delay action on the resolution this session out of political caution and risking their seats in fiscally conservative districts. But don’t relax — they’ve already said they are preparing a 2026 ballot measure to dismantle TABOR. It’s predicted to resemble 2005’s Ref C, so voters should brace for misleading ballot language and long-term consequences.

Here’s what Ref C did: Taxpayers forfeited TABOR refunds for 5-years and let the state permanently keep billions beyond the voter-approved revenue cap.

REF C fiscal impact:
From 1992 – 2004, TABOR has refunded about $11.98 billion to taxpayers.
In contrast, Ref C has allowed the state to retain over $37.23 billion. That’s three times more money kept by government than returned to the people.

That $37.23 billion is in addition to the allowed reasonable TABOR cap of letting government tax revenue grow by inflation + population.

That’s what’s at stake — not just dollars, but your constitutional right to say no.

Natalie Menten
TABOR Board Member

 

 

 

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