Category Archives: Legal Issues

Feb 26

After 25 years, TABOR still works for you

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Douglas Bruce, author of the state’s Taxpayer’s Bill of Rights, is pictured in 2005 working on the campaign against Referendum C .

By Penn R. Pfiffner and Douglas Bruce | Guest Commentary

PUBLISHED: February 24, 2017 at 1:01 pm

The Taxpayer’s Bill of Rights works for you and its 25th anniversary this year is worth celebrating. Once again in 2017 you need to protect TABOR from the political elite attacking it.

TABOR belongs to you. It is how you set a broad control on government that must answer to you and your fellow citizens. It has succeeded in keeping a better balance between costly government programs and healthy family budgets.

Everyone has to live within a budget. That’s just life. Staying in budget brings stability to your family and helps you choose the most important ways to spend your money. The value of living within a budget applies not just to individuals and families, but also to government. That’s just smart — and fair.

To read the rest of this story, click (HERE):

Jan 01

Colorado Taxpayer Bill of Rights, Initiative 1 (1992)

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The Colorado Taxpayer Bill of Rights (TABOR), also known as Initiative 1, was on the November 3, 1992 ballot in Colorado as an initiated constitutional amendment, where it was approved. The famed measure, thought up by Douglas Bruce, requires statewide voter approval of tax increases that exceed an index created by combining inflation and population increases.

 

 

 

 

 

Text of measure

See also: Colorado State Constitution, Article X

The language appeared on the ballot as:[2]

“ Shall there be an amendment to the Colorado Constitution to require voter approval for certain state and local government tax revenue increases and debt; to restrict property, income, and other taxes; to limit the rate of increase in state and local government spending; to allow additional initiative and referendum elections; and to provide for the mailing of information to registered voters? ”

Aftermath

Kerr v. Hickenlooper

See also: Kerr v. Hickenlooper

A lawsuit regarding Initiative 1 will likely have far reaching effects for other TABOR laws around the country and direct democracy, in general. A lawsuit was filed with U.S. District Court in Denver, with plaintiffs arguing that the amendment is unconstitutional. The lawsuit was filed during the week of May 27, 2011, by 34 bipartisan plaintiffs, according to reports.

According to Doug Bruce, author of the citizen initiative, if the lawsuit is successful in its efforts, it could allow lawmakers unlimited power, and could be extremely detrimental to citizen initiative efforts in the state of Colorado. Bruce stated: “This isn’t only attacking Colorado. The consequences of a ruling in their favor would invalidate the Constitution in all 50 states, and would also mean no limits on the federal government. We would have anarchy.”

However, one of the attorneys for the plaintiffs, David Skaggs, stated that the measure limits state legislators and conflicts with both the state and United States constitutions. Skaggs also argues that other initiatives have been overturned, but that it did not negatively affect the process. Skaggs commented: “Courts won’t reach beyond the narrow question presented. Yes, we got to this issue by initiative”, but the lawsuit targets TABOR and not citizens’ initiatives.

The case’s impact expanded significantly due to the consideration of a Guarantee Clause argument. In 2012, Colorado District Court Judge William J. Martínez ruled in favor of allowing the case to proceed. However, Martínez’s ruling noted the history of seeing the Guarantee Clause as not justiciable or capable of judicial resolution, and said, “the Court determines that it cannot summarily conclude that Plaintiffs’ Guarantee Clause claim is per se non-justiciable”

The defense appealed the decision to the 10th Circuit Court of Appeals. In March 2014, the court ruled that the case was justiciable. The court further denied a petition for rehearing en banc in July 2014. Some consider the case likely to reach the U.S. Supreme Court.

http://ballotpedia.org/Colorado_Taxpayer_Bill_of_Rights,_Initiative_1_(1992)

Dec 31

EDITORIAL: Negative Impacts, Part Three

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BY · DECEMBER 29, 2016

Read Part One

If a person wants to build a single-family home within the Pagosa Springs town limits, he or she must pay $3,342 in Town “impact fees.” That money is purportedly earmarked for the “impacts” that the new residents — who will occupy this new house — will have on roads, recreation facilities, public buildings, parks, trails, emergency services and schools.  (Assuming that the people who will occupy this new house haven’t already lived in Pagosa for maybe 25 years.)

The justification typically offered for such fees, is: “growth must pay for growth.”

We are working, here, under the assumption that there is a difference between a “tax” and a “fee.” The Colorado Constitution specifically requires voter approval for tax increases, and for the creation of a new tax — but no such voter approval is required for fee increases, or for the creation of a new fee.

Obviously, the difference is of some significance, here in Colorado.

A recent Colorado lawsuit can help us understand how one particular panel of judges defined the difference between a “tax” and a “fee.”

In 2009, during a particularly difficult period in the financial life of the Colorado state government, the state legislature created a new government agency called the Colorado Bridge Enterprise (CBE). The agency began charging a new “fee” as part of your vehicle registration fee; the money was (purportedly) to be used for repairing state-maintained bridges. The state did not seek voter approval for the new surcharge.

In 2012, the TABOR Foundation filed a lawsuit against the state, arguing that the “fee” was in fact a “tax” — and was thus prohibited by the state’s Taxpayer Bill of Rights (TABOR) unless approved by the state’s voters. During the deliberations, the Colorado Court of Appeals disagreed with one of the TABOR Foundation’s arguments: that the surcharge is a “tax” because it is collected without regard to any services used by the vehicles for which the charge is imposed.

The court laid out three factors that it weighed in determining whether a surcharge is a tax or a fee:

Continue reading →

Oct 23

What Does The Taxpayer’s Bill Of Rights Mean?

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Taxpayer_Bill_of_Rights

Section 20

Text of Section 20:

The Taxpayer’s Bill of Rights

(1) General provisions. This section takes effect December 31, 1992 or as stated. Its preferred interpretation shall reasonably restrain most 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. Other limits on district revenue, spending, and debt may be weakened only by future voter approval. Individual or class action enforcement suits may be filed and shall have the highest civil priority of resolution. Successful plaintiffs are allowed costs and reasonable attorney fees, but a district is not unless a suit against it be ruled frivolous. Revenue collected, kept, or spent illegally since four full fiscal years before a suit is filed shall be refunded with 10% annual simple interest from the initial conduct. Subject to judicial review, districts may use any reasonable method for refunds under this section, including temporary tax credits or rate reductions. Refunds need not be proportional when prior payments are impractical to identify or return. When annual district revenue is less than annual payments on general obligation bonds, pensions, and final court judgments, (4) (a) and (7) shall be suspended to provide for the deficiency.

(2) Term definitions. Within this section:

(a) “Ballot issue” means a non-recall petition or referred measure in an election.
(b) “District” means the state or any local government, excluding enterprises.
(c) “Emergency” excludes economic conditions, revenue shortfalls, or district salary or fringe benefit increases.
(d) “Enterprise” means a government-owned business authorized to issue its own revenue bonds and receiving under 10% of annual revenue in grants from all Colorado state and local governments combined.
(e) “Fiscal year spending” means all district expenditures and reserve increases except, as to both, those for refunds made in the current or next fiscal year or those from gifts, federal funds, collections for another government, pension contributions by employees and pension fund earnings, reserve transfers or expenditures, damage awards, or property sales.
(f) “Inflation” means the percentage change in the United States Bureau of Labor Statistics Consumer Price Index for Denver-Boulder, all items, all urban consumers, or its successor index.
(g) “Local growth” for a non-school district means a net percentage change in actual value of all real property in a district from construction of taxable real property improvements, minus destruction of similar improvements, and additions to, minus deletions from, taxable real property. For a school district, it means the percentage change in its student enrollment.

(3) Election provisions.

(a) Ballot issues shall be decided in a state general election, biennial local district election, or on the first Tuesday in November of odd-numbered years. Except for petitions, bonded debt, or charter or constitutional provisions, districts may consolidate ballot issues and voters may approve a delay of up to four years in voting on ballot issues. District actions taken during such a delay shall not extend beyond that period.
(b) At least 30 days before a ballot issue election, districts shall mail at the least cost, and as a package where districts with ballot issues overlap, a titled notice or set of notices addressed to “All Registered Voters” at each address of one or more active registered electors. The districts may coordinate the mailing required by this paragraph (b) with the distribution of the ballot information booklet required by section 1 (7.5) of article V of this constitution in order to save mailing costs. Titles shall have this order of preference: “NOTICE OF ELECTION TO INCREASE TAXES/TO INCREASE DEBT/ON A CITIZEN PETITION/ON A REFERRED MEASURE.” Except for district voter-approved additions, notices shall include only:
(i) The election date, hours, ballot title, text, and local election office address and telephone number.
(ii) For proposed district tax or bonded debt increases, the estimated or actual total of district fiscal year spending for the current year and each of the past four years, and the overall percentage and dollar change.
(iii) For the first full fiscal year of each proposed district tax increase, district estimates of the maximum dollar amount of each increase and of district fiscal year spending without the increase.
(iv) For proposed district bonded debt, its principal amount and maximum annual and total district repayment cost, and the principal balance of total current district bonded debt and its maximum annual and remaining total district repayment cost.
(v) Two summaries, up to 500 words each, one for and one against the proposal, of written comments filed with the election officer by 45 days before the election. No summary shall mention names of persons or private groups, nor any endorsements of or resolutions against the proposal. Petition representatives following these rules shall write this summary for their petition. The election officer shall maintain and accurately summarize all other relevant written comments. The provisions of this subparagraph (v) do not apply to a statewide ballot issue, which is subject to the provisions of section 1 (7.5) of article V of this constitution.
(c) Except by later voter approval, if a tax increase or fiscal year spending exceeds any estimate in (b) (iii) for the same fiscal year, the tax increase is thereafter reduced up to 100% in proportion to the combined dollar excess, and the combined excess revenue refunded in the next fiscal year. District bonded debt shall not issue on terms that could exceed its share of its maximum repayment costs in (b) (iv). Ballot titles for tax or bonded debt increases shall begin, “SHALL (DISTRICT) TAXES BE INCREASED (first, or if phased in, final, full fiscal year dollar increase) ANNUALLY…?” or “SHALL (DISTRICT) DEBT BE INCREASED (principal amount), WITH A REPAYMENT COST OF (maximum total district cost), …?”

(4) Required elections. Starting November 4, 1992, districts must have voter approval in advance for:

(a) Unless (1) or (6) applies, any new tax, tax rate increase, mill levy above that for the prior year, valuation for assessment ratio increase for a property class, or extension of an expiring tax, or a tax policy change directly causing a net tax revenue gain to any district.
(b) Except for refinancing district bonded debt at a lower interest rate or adding new employees to existing district pension plans, creation of any multiple-fiscal year direct or indirect district debt or other financial obligation whatsoever without adequate present cash reserves pledged irrevocably and held for payments in all future fiscal years.

(5) Emergency reserves. To use for declared emergencies only, each district shall reserve for 1993 1% or more, for 1994 2% or more, and for all later years 3% or more of its fiscal year spending excluding bonded debt service. Unused reserves apply to the next year’s reserve.

(6) Emergency taxes. This subsection grants no new taxing power. Emergency property taxes are prohibited. Emergency tax revenue is excluded for purposes of (3) (c) and (7), even if later ratified by voters. Emergency taxes shall also meet all of the following conditions:

(a) A 2/3 majority of the members of each house of the general assembly or of a local district board declares the emergency and imposes the tax by separate recorded roll call votes.
(b) Emergency tax revenue shall be spent only after emergency reserves are depleted, and shall be refunded within 180 days after the emergency ends if not spent on the emergency.
(c) A tax not approved on the next election date 60 days or more after the declaration shall end with that election month.

(7) Spending limits.

(a) The maximum annual percentage change in state fiscal year spending equals inflation plus the percentage change in state population in the prior calendar year, adjusted for revenue changes approved by voters after 1991. Population shall be determined by annual federal census estimates and such number shall be adjusted every decade to match the federal census.
(b) The maximum annual percentage change in each local district’s fiscal year spending equals inflation in the prior calendar year plus annual local growth, adjusted for revenue changes approved by voters after 1991 and (8) (b) and (9) reductions.
(c) The maximum annual percentage change in each district’s property tax revenue equals inflation in the prior calendar year plus annual local growth, adjusted for property tax revenue changes approved by voters after 1991 and (8) (b) and (9) reductions.
(d) If revenue from sources not excluded from fiscal year spending exceeds these limits in dollars for that fiscal year, the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset. Initial district bases are current fiscal year spending and 1991 property tax collected in 1992. Qualification or disqualification as an enterprise shall change district bases and future year limits. Future creation of district bonded debt shall increase, and retiring or refinancing district bonded debt shall lower, fiscal year spending and property tax revenue by the annual debt service so funded. Debt service changes, reductions, (1) and (3) (c) refunds, and voter-approved revenue changes are dollar amounts that are exceptions to, and not part of, any district base. Voter-approved revenue changes do not require a tax rate change.

(8) Revenue limits.

(a) New or increased transfer tax rates on real property are prohibited. No new state real property tax or local district income tax shall be imposed. Neither an income tax rate increase nor a new state definition of taxable income shall apply before the next tax year. Any income tax law change after July 1, 1992 shall also require all taxable net income to be taxed at one rate, excluding refund tax credits or voter-approved tax credits, with no added tax or surcharge.
(b) Each district may enact cumulative uniform exemptions and credits to reduce or end business personal property taxes.
(c) Regardless of reassessment frequency, valuation notices shall be mailed annually and may be appealed annually, with no presumption in favor of any pending valuation. Past or future sales by a lender or government shall also be considered as comparable market sales and their sales prices kept as public records. Actual value shall be stated on all property tax bills and valuation notices and, for residential real property, determined solely by the market approach to appraisal.

(9) State mandates. Except for public education through grade 12 or as required of a local district by federal law, a local district may reduce or end its subsidy to any program delegated to it by the general assembly for administration. For current programs, the state may require 90 days notice and that the adjustment occur in a maximum of three equal annual installments.[1]

Amendments

http://ballotpedia.org/Article_X,_Colorado_Constitution

Oct 07

Will school districts make the difference in the legal fight against TABOR, Colorado’s tax law?

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By Yesenia Robles
yrobles@chalkbeat.org
PUBLISHED: October 3, 2016 – 7:55 p.m. EDT

colorado-capitol-dome-tabor( Photo by Denver Post file )
A long-running legal challenge to Colorado’s constitutional amendment limiting tax revenues gained significant new allies Monday: school boards from five school districts.
Earlier this year, the U.S. Court of Appeals for the 10th circuit ruled that the lawsuit brought in 2011 had no standing because the original plaintiffs were not “directly injured by the law.”

The hope is that adding school districts to the lawsuit will meet that standard, and convince a district court judge that the lawsuit should proceed.

The boards from Denver Public Schools, Boulder Valley School District, Pueblo City Schools, Cheyenne County School District and Gunnison Watershed School District joined the suit.
Mike Johnson, a Denver school board member, said in a statement that since TABOR was enacted 24 years ago, Colorado has dropped to No. 42 in the nation in public funding for education, more than $2,000 per pupil lower than the national average.

“We are joining this lawsuit to restore the ability of the DPS board and the legislature to fund public education at the level Colorado students deserve,” said Johnson, who made the case to his board colleagues last month to join the lawsuit.

The Taxpayer’s Bill of Rights, or TABOR, was passed by voters in 1992. The law requires that local governments get approval from voters before raising taxes. It also limits the amount of taxes the government can collect, triggering refunds if revenues exceed an annually-adjusted cap, unless voters allow the government to keep the extra money. Continue reading →

Oct 07

Colorado school districts join legal fight against TABOR

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School officials say they have standing as plaintiffs because of drop in funding

Colorado school boards who claim Colorado’s Taxpayer Bill of Rights has decimated student funding have joined a five-year legal fight to have the law dismantled.

Five Colorado school boards have been added as new plaintiffs in the original federal lawsuit filed against the anti-tax measure, also known as TABOR. The suit was filed in 2011 and led by state Sen. Andy Kerr and House Speaker Dickey Lee Hullinghorst.

In June 2015, the U.S. Supreme Court returned the case to the 10th U.S. Circuit Court of Appeals in Denver for further review. But in June 2016, the Court of Appeals determined the legislative plaintiffs did not have standing to sue. The case was then sent back to U.S. District Court.

Lawyers for the original plaintiffs hope to keep the suit alive with the addition of the school districts, saying the districts have legal standing to sue because they have been directly injured by TABOR.

To read the rest of the story, click (HERE):

Oct 07

TABOR lawsuit is back, stronger than ever

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TABOR lawsuit is back, stronger than ever

After suffering a major setback earlier this year, the legal team trying to repeal Colorado’s Taxpayer Bill of Rights amendment is back and charging once again into the breach.

Better known as TABOR, the amendment limits state spending and prohibits tax increases without a vote of the people. It has been panned by many lawmakers and policy analysts, and some point to it as a reason why Colorado lags in education funding nationally. Still, supporters believe it is a venerable effort at direct democracy.

In 2011, a group of public officials filed a lawsuit against the 1992 TABOR amendment, which puts an annual cap on the state’s tax revenue, on the grounds that it is unconstitutional. The case is officially filed against Governor Hickenlooper, who as head of state represents the Colorado Constitution. In the intervening five years, the case’s legitimacy has been, at different turns, supported, disputed and ultimately denied.

In 2013, two years after the case was filed, the Tenth Circuit approved it, heard it and handed down a decision in favor of the plaintiffs in 2014. But Colorado’s then-Attorney General, John Suthers, challenged that decision, arguing that the plaintiffs did not in fact qualify to be heard. The Supreme Court sided with Suthers and issued an order for the Tenth Circuit to reconsider the case in light of a recent decision, Arizona Legislature v. Arizona Redistricting Commission, that mandated that plaintiffs in this kind of case must be composed of complete government bodies, not just individuals. Continue reading →

Oct 07

Pueblo City Schools joins in lawsuit challenging TABOR

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Pueblo City Schools joins in lawsuit challenging TABOR

Pueblo City Schools (D60) has added its name to a list of plaintiffs in a constitutional challenge to Colorado’s Taxpayer’s Bill of Rights.

During its regular September meeting, the board of education approved a resolution that will see the district become part of the Kerr et al v. Hickenlooper civil lawsuit, filed in 2011 in U.S. District Court in Colorado.

The plaintiffs — current and past state legislators, public officials, educators, administrators and private citizens — have sued to overturn TABOR.

“The ability of Pueblo School District No. 60 to provide adequate education services to its students depends in part on its ability to convince the Colorado General Assembly to adequately fund the Public School Finance Act,” the approved resolution declares.

Additionally, the Taxpayer’s Bill of Rights “prevents the state and its local school districts from fulfilling their constitutional obligations to adequately fund the public schools” and has impinged on the district’s ability to provide for the education of its children “due to requirements for elections to approve any increases in the property tax mill levies.” Continue reading →