Category Archives: Legal Issues

Jun 14

Colorado’s Taxpayer Bill of Rights (TABOR) Should Be a Role Model for the Nation

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Colorado’s Taxpayer Bill of Rights (TABOR) Should Be a Role Model for the Nation

June 12, 2018 by Dan Mitchell

A balanced budget requirement is neither necessary nor sufficient for good fiscal policy.

If you want proof for that assertion, check out states such as Illinois, California, and New Jersey. They all have provisions to limit red ink, yet there is more spending (and more debt) every year. There are also anti-deficit rules in nations such as Greece, France, and Italy, and those countries are not exactly paragons of fiscal discipline.

The real gold standard for good fiscal policy is my Golden Rule. And the best way to make sure government doesn’t grow faster than the private sector is to have a constitutional rule limiting the growth of government.

That’s why I’m a big fan of the “debt brake” in Switzerland’s constitution and Article 107 in Hong Kong’s constitution.

And it’s also why the 49 other states, assuming they want an effective fiscal rule, should look at Colorado’s Taxpayer Bill of Rights (TABOR) as a role model.

Colorado’s Independence Institute has a very informative study on how TABOR works and the degree to which it has been effective. Here’s a good description of the system.

Colorado voters adopted The Taxpayer’s Bill of Rights in 1992. TABOR allows government spending to grow each year at the rate of inflation-plus-population. Government can increase faster whenever voters consent. Likewise, tax rates can be increased whenever voters consent. …The Taxpayer’s Bill of Rights requires that excess government revenues be refunded to taxpayers, unless taxpayers vote to let the government keep the revenue.

And here are the headline results.

Cumulatively, TABOR refunds have been over $800 per Coloradan, or $3,200 for a family of four. …If Colorado government had continued growing at the same high rate (8.56% compound annual rate) as in 1983-92, the average Coloradan would have paid an additional $442 taxes in 2012. The cumulative two-decade savings per Coloradan are $6,173—or more than $24,000 for a family of four.

Continue reading →

Jun 13

The Grand Junction Area Chamber of Commerce hailed a court ruling a stormwater drainage fee is actually an unconstitutional tax.

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Chamber hails drainage fee court ruling
Article date: Jun 12 2018

The Grand Junction Area Chamber of Commerce hailed a court ruling a stormwater drainage fee is actually an unconstitutional tax.
Drainage remains a problem, however, that will require a collaborative effort to solve, the chamber stated in a news release.
District Court Judge Lance Timbreza ruled a fee assessed by the Grand Valley Drainage District on property owners constitutes a tax imposed without a vote as required under state constitutional provisions. The chamber and Mesa County sued the district in 2016 to halt the fee following eight months of failed negotiations.

“This is a victory for every property owner within the Grand Valley Drainage District boundaries, including many of our business members,” said Diane Schwenke, president and chief executive officer of the chamber. “It upholds the principles of the Taxpayer Bill of Rights and requires the district to convince voters that additional funding is needed, as TABOR clearly intended.”

The district assessed homeowners $3 a month — or $36 a year. Businesses, churches and government entities were charged $3 a month for every 2,500 square feet of roofs and parking lots from which stormwater drains.

Many businesses were assessed annual fees of up to $10,000, Schwenke said.
The chamber remains willing to a play a role in addressing drainage problems, Schwenke said. Collaborative efforts will be required that involve not only the district, but other government entities in the Grand Valley, she said.

The chamber supports a process involving all entities responsible for drainage as well as an exploration of all funding models, she said.
Moreover, more accountability and transparency will be needed regarding how priorities are set for drainage projects, how funds are spent and how funds are leveraged with money from such other sources as grants.

The chamber remains opposed to an impact fee for business expansions, Schwenke said. Business growth improves the economy, creates jobs and adds to the tax base, she said.

http://thebusinesstimes.com/chamber-hails-drainage-fee-court-ruling/

Jun 12

Your TABOR Foundation is suing the State of Colorado

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The TABOR Foundation is suing the State of Colorado over the bed tax termed a “Hospital Provider” charge, which was imposed without voter approval in strict violation of the Taxpayer’s Bill of Rights.  Our lawsuit had to be substantially amended when Senate Bill 17- 267 further flaunted the constitution by increasing the tax limit by $400+ million, defining the hospital welfare program as an off-the-books government business, issuing $2 billion in debt and much else – all without any regard to the requirements in TABOR.

In late March, we learned that our attorneys at Mountain States Legal Foundation had to withdraw.  From our outside observation point, some internal reorganization appears to have been the reason.  From everything that I have seen and heard, neither the TABOR Foundation nor the other three Plaintiffs contributed to the difficult situation.

In early April, Judge Buchanan gave us 60 days to find replacement counsel.

This email is a happy announcement that the TABOR Foundation met that deadline to recruit new attorneys and the hand-off is just about complete.  Yesterday, the TABOR Foundation appeared at a new Hearing as ordered by Judge Buchanan.  With us were the outgoing attorneys and participating by telephone were our new attorneys.  One of the other Plaintiffs, Scott Rankin, also attended.  The Court approved the substitution.  We have pulled together another very strong team so the outlook is positive.  Our new legal representation is by Cause of Action Institute, with Lee Steven and James Valvo stepping into the lead roles.  Our Colorado-licensed attorney is Michael Francisco, who while working in the Colorado Attorney General’s office helped to write the defense of TABOR in Kerr vs. Hickenlooper.

Now that the legal activity may move forward, look for more communications about developments no later than the fall…..

Penn R. Pfiffner
Chairman

Jun 12

Potential TABOR Violation by the City of Lakewood

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A TABOR fan emailed us:
“Lakewood city council wants to keep the $12 million due back to the taxpayers. Stealing is still illegal right?,”

Our President responded, “What was the source of the $12 million?
If collected by the City, what circumstances would it be due back to the taxpayers? Over-collection (that is above the TABOR limit) or something else?”

The response was, “It was on the channel 8 Lakewood City Council meeting last night. Over collection.”

Our response is as follows,
“You asked about a week ago if the TABOR Committee would look into the potential diversion of funds by the City of Lakewood. Continue reading →

Jun 07

Extras on Excise: California’s Take on ‘Tax v. Fee’

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Jun 6, 2018 / by Laura Lieberman

Extras on Excise: California’s Take on ‘Tax v. Fee’

 Due to states’ various ways of classifying and labeling charges, there is often confusion over the difference between taxes and fees. In many instances, there are constitutional restrictions on how states may impose or increase “taxes,” such as voter approval requirements, whereas fee impositions and increases have fewer hurdles. A recent California Supreme Court opinion illustrates how California determines whether a payment to a governmental entity is considered a tax or a fee.

In Calif. Bldg. Indus. Ass’n v. State Water Resources Control Bd., No. S226753 (Cal. May 7, 2018), the Court noted that determining whether a charge is a tax or fee has been a “‘recurring chore’ for California courts” for the past several decades. The courts are tasked with this responsibility because 1978’s Proposition 13, which incorporated Article XIII A into the state constitution (requiring tax increases to be approved by a supermajority in both the Senate and the Assembly), did not originally define “tax” (later amendments defined the term).

For this particular case, the court determined that the charge in question, the water waste discharge fee, was a fee and not an unconstitutional tax. They reached this conclusion by applying the test for identifying regulatory fees from Sinclair Paint Co. v. State Bd. of Equalization, 937 P.2d 1350 (Cal. June 26, 1997), which states that a levy is a regulatory fee if the following apply:

  • The amount of the fee does not exceed reasonable costs of providing the service that it is imposed for;
  • the fee is not imposed for unrelated revenue purposes; and
  • the fee amount has a reasonable relationship to the burdens that the feepayers’ activities or operations create.

Here, the court found that these three requirements were met. The water fee amounts did not exceed the costs for providing the services, the fee structure “explicitly limited fees to the amount necessary to recover the administrative costs of the permit program,” and the state records proved that the water resources control board had used a reasonable allocation methodology. The water waste discharge fee was thus a fee, not a tax, and the board’s decision to increase the fee did not require having the Legislature pass a bill.

Continue reading →

Jun 07

Opinion: Newcomers need to know benefits of Colorado’s Taxpayer’s Bill of Rights

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Opinion: Newcomers need to know benefits of Colorado’s Taxpayer’s Bill of Rights

Jennifer Schubert-Akin and Amy Oliver Cooke
For Steamboat Pilot & Today

The latest Census Bureau data released earlier this year shows that Colorado’s population has grown by nearly two-thirds since 1992, one of the fastest increases in the country. 

If you are part of the more than two million new residents who have arrived over this time, there are a few things you should know: Avoid I-70 on Sundays. We are Coloradans, not Coloradoans. And the Taxpayer’s Bill of Rights is responsible for much of the state’s economic success, which likely drew you here in the first place.

Between 1992 and 2016, median household income in Colorado grew by 30 percent, adjusted for inflation. This growth was more than double the national rate over the same period. Only Minnesota and North Dakota grew by more than 30 percent over this timeframe. Colorado gained $20 billion in adjusted gross income over these years — again, one of the biggest increases in the nation. 

While many other states have struggled with stagnant incomes over this period, what’s set Colorado apart? Its Taxpayer’s Bill of Rights, or TABOR, passed in 1992, which requires state and local governments to ask voters for permission before raising taxes or debt. 

TABOR helped end years of economic stagnation and laid the groundwork for the state’s future success by keeping resources in the hands of Colorado residents who could put them to their highest valued use and checking overzealous government spending. 

TABOR has protected pocketbooks and state solvency from legislators who believe they know how to spend your money better than you. Its requirement that excess revenues must be refunded to taxpayers has also resulted in more than $2 billion being returned to the private economy to be spent at local businesses or saved for retirement.  

 

Continue reading →

Jun 07

Judge rules drainage district’s stormwater “fee” is actually a “TAX”

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Judge rules drainage district’s stormwater fee is actually a tax

  • SENTINEL STAFF
A Mesa County judge ruled today that two year’s worth of money collected by the Grand Valley Drainage District to deal specifically with stormwater should be classified as a tax, and as such was improperly collected because the district did not get voter approval for the extra charge.

The Grand Junction Area Chamber of Commerce and Mesa County, who brought the lawsuit challenging the extra stormwater charges, celebrated the ruling by Mesa County District Judge Lance Timbreza.

“This is a victory for every property owner within the Grand Valley Drainage District boundaries, including many of our business members,” chamber President and CEO Diane Schwenke is quoted as saying.

“It upholds the principles of the Taxpayer’s Bill of Rights (TABOR) and requires the District to convince voters that additional funding is needed, as TABOR clearly intended.”

The chamber and the county sued the drainage district after customers began receiving bills in 2016 specifically to address projects related to stormwater. Homeowners for the past two years have been charged an extra $36 a year, while many businesses saw new annual charges of up to $10,000.

The chamber and county argued the additional charge was a tax, and as such required voter approval under the state’s Taxpayer’s Bill of Rights constitutional amendment.

Read the full story in the Wednesday edition of the Daily Sentinel.

http://www.gjsentinel.com/breaking/judge-rules-drainage-district-s-stormwater-fee-is-actually-a/article_57fd4c46-68ed-11e8-86d9-a35f681c4db8.html

Jun 07

Colorado Supreme Court Issues 2nd Anti-TABOR Decision in Less than a Month—Showing Why We Need Reform!

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Colorado Supreme Court Issues 2nd Anti-TABOR Decision in Less than a Month—Showing Why We Need Reform!

The Colorado Supreme Court has continued its demolition campaign against the Colorado Taxpayer’s Bill of Rights (TABOR) with a new decision further restricting the people’s right to vote on tax increases. This latest decision comes less than a month after the court held the people have no right to vote on a law that re-adjusted sales tax exemptions in a manner that increased revenue.

Continue reading →

Jun 04

Grand Lake rescinds municipal fee

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Good news from Grand Lake!

I am pleased to announce that the Town of Grand Lake has rescinded the outrageous municipal fee this last Tuesday, May 29th by a vote of 6-1.  The action followed two unsuccessful attempts to rescind the municipal fee on January 8th and February 12th 2018

This could have not been possible, if it were not for the election of four new trustees at the April 2nd election.  All four new trustees voted to rescind the municipal fee along with the Mayor and myself.

A little background:  The municipal fee was adopted to cover approximately 50% ($80k annually) of the cost to cover police service including dispatch and street lighting.  Traditionally, these expenses were always covered by the normal taxes and fees collected in the general fund.

The Municipal fee became a “Hot Topic” during the election process and the candidate forum we had at the end of March.  The electorate was offended that they were not asked to vote for the municipal fee, but rather the money was stolen out of their pocketbooks just as a common thief would do.   Continue reading →

May 23

Supreme Court upholds Aspen’s grocery bag fee

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Supreme Court upholds Aspen’s grocery bag fee

Plastic Bags

Aspen City Council banned plastic grocery bags, shown here in a market in Snowmass Village, in 2011, while implementing a 20-cent fee on paper bags. The Colorado Supreme Court on Monday found that the fee was not a tax.  

Craig Turpin

The Colorado Supreme Court, in a 4-3 decision announced Monday, upheld Aspen’s fee on paper grocery bags, finding that the 20-cent charge is not a tax because it offsets the costs of a municipal waste-reduction program.

The state high court upheld a district court decision from 2014 and a Colorado Court of Appeals ruling from 2015. The Colorado Union of Taxpayers, a Lakewood-based group that advocates for conservative tax policy, brought the lawsuit following the program’s implementation in 2012, arguing that the fee is actually a tax. Since new taxes must be approved by voters under the Colorado Taxpayer’s Bill of Rights constitutional amendment, the group argued that the fee, which was not put up for voter approval, was unconstitutional.

Aspen City Council in 2011 passed the so-called waste-reduction ordinance, which banned single-use plastic bags offered upon checkout at local grocery stores and required the 20-cent fee for paper bags. The program’s goal is to encourage shoppers to bring reusable bags while ridding the community of the ubiquitous plastic bags that create an environmental hazard when not disposed of properly and otherwise contribute to the waste steam.

Continue reading →