Category Archives: Legal Issues

Aug 14

CORPORATE WELFARE: Gaylord Hotel Project Benefits from Fishy Tax Scheme

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Aurora politics have been thrust into the spotlight based on reports that a new hotel tax scheme is fostering corporate welfare on a massive scale.

The controversial Gaylord Hotel project in Aurora is benefiting from a special tax district created by the Aurora City Council.  The catch is that only a single voter has approved the tax increases in this special district, and all the future revenue has been awarded to the Gaylord project’s developer.  The whole thing sounds fishy by any measure.

The Colorado Springs Gazette explains further: 

The city of Aurora invented an incentive tool called an enhanced taxing area to levy higher admissions and lodging taxes, imposed a general improvement district with a 40-mill property tax levy, and declared agricultural land blighted to use urban renewal tax incentives.

Critics say the Aurora deal is an unprecedented giveaway of taxpayer money to a private developer over a 30-year period. [Peak emphasis]

Continue reading →

Jul 24

Penn’s take on Kerr order denying rehearing en banc

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TABOR Directors and friends,

We will not see a review by (appeal to) the entire US 10th Circuit Court of Appeals (en banc) in the federal case to overturn the Taxpayer’s Bill of Rights.

The next logical step is for the Defendant to ask the US Supreme Court to hear an appeal that the case should not proceed to the trial phase because the substance of the case does not fall within the judicial branch to decide.  The Solicitor General’s office this morning confirmed in a telephone call with me that such a filing is contemplated.

Luke Wake and his team at NFIB are ready to help out once again.  See his message below.

The dissents from the 10th Circuit Court are telling and a very important development in proceeding to the next step.  They follow the very brief ruling in the attachment.

Our TABOR Foundation is committed to seeing this through as far as we need to, and Board approval is already in place.  I’ll keep you informed as I learn more.

Penn Pfiffner

I’ve been in communication with each of you about the Kerr v. Hickenlooper case, wherein a handful of ideologically motivated litigants are challenging the constitutionality of the Colorado Taxpayer Bill of Rights (TABOR). TABOR was an initiative approved by Colorado voters in the early 1990s, which gives the citizens a right to vote on new taxes. NFIB was very supportive of the reform then and the NFIB Legal Center is now leading its defense (along with TABOR Foundation).
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> As you recall, I previously explained that the Tenth Circuit federal court of appeal recently decided to allow a “Guarantee Clause” challenge to proceed against TABOR. And I’ve said before, this would open Pandora’s box for challenges to any constitutional amendment restraining the legislature’s tax and spend powers, or potentially any amendment limiting the state’s police powers.  We were hopeful that the Tenth Circuit would review the decision because it is binding on all Tenth Circuit states, and because it provides persuasive authority that could be invoked by litigants challenging taxpayer protections in other states as well. Unfortunately the Tenth Circuit denied Governor Hickenlooper’s petition for en banc review; however, there were three very strong dissenting opinions (see attached). These dissents largely echoed the concerns we raised in our original amicus brief.
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> Given the force of these three dissents, I should think the State is in as good a position as possible in pursuing a petition for certiorari in the U.S. Supreme Court. When considering whether to take a case the Supreme Court asks two questions: (1) Does this decision create a conflict between federal circuits, or does it expressly conflict with a previous Supreme Court decision? (2) Does the case raise an issue of national concern? Both can be answered in the affirmative.
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> Early in the 20th Century, the Supreme Court decided that a Guarantee Clause challenge to Oregon’s initiative process was precluded by the political questions doctrine. The Court has since repeatedly affirmed that Guarantee Clause cases are non-justiciable. In a 1992 opinion Justice Ginsberg held out the possibility that there may be some conceivable Guarantee Clause case that might be justiciable [we don’t necessarily disagree that there might be some case in the future], but no Court of Appeal has found one to date–except the Tenth Circuit in this case.
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> The Tenth Circuit held that a Guarantee Clause challenge should be allowed to move forward despite the fact that the judges were not presently aware of any standard or principled rule for how the case might possibly be decided. This is highly problematic because it encourages litigation without principled rules.  And the case certainly raises an issue of national concern because–as discussed above–it invites challenges to potentially any state constitutional amendment, especially voter initiatives–and most especially taxpayer protections.
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> We are now planning to file an amicus brief encouraging the Supreme Court to take the case. Each of you has indicated that your organization has tentatively agreed to join with us in this filing. Please let me know if you have any questions. My understanding is that the State will be filing its petition for certiorari sooner than later. So we may be filing as early as September. I will keep you all in the loop.
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> Very best,
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> -Luke

Jul 23

Colorado AG loses another round from Court of Appeals on TABOR lawsuit

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By Lynn Bartels

The Denver Post

John Suthers
Colorado Attorney General John Suthers (Kathryn Scott Osler, Denver Post file photo)

Attorney General John Suthers has lost his request to have the entire 10th U.S. Circuit Court of Appeals rehear a decision by a court panel that ruled Coloradans have a right to challenge the constitutionality of the Colorado Taxpayer’s Bill of Rights.

The 6-4 decision by the court marks another milestone in a legal fight over how Colorado conducts its most important functions. One of the court’s 11 judges recused himself.

Colorado voters in 1992 passed the TABOR amendment, which in part limits state spending and bars lawmakers from raising taxes without a vote of the people.

A lawsuit filed against Gov. John Hickenlooper in 2011 argues that by taking away lawmakers’ ability to tax, TABOR violates the U.S. Constitution’s guarantee that every state have a republican form of government.

Suthers questioned whether the plaintiffs had the right to sue, but was rebuffed by a U.S. District Court judge. A panel of Court of Appeals judges in March concurred with the lower court.

In its 49-page decision, the 10th U.S. Circuit panel in March noted the Supreme Court has held that members of a state legislature may have standing to sue in order to vindicate the “plain, direct and adequate interest in maintaining the effectiveness of their votes.”

It did not rule on the merits of the case.

Suthers then asked for the entire court to decide whether plaintiffs had standing and other issues.

The latest decision paves the way for a trial in U.S. District Court unless the attorney general successfully seeks review by the U.S. Supreme Court.

“We are of course gratified with this decision supporting the plaintiffs’ position that the case should be heard on its merits, and we look forward to that hearing in U. S. District Court,” one of the plaintiffs’ attorneys, Mike Feeley said, in a statement.

“Now, with the procedural objections resolved and three rulings all in the plaintiffs’ favor — one in U. S. District Court in 2012 and two this year by the 10th Circuit — we hope the case can proceed without delay and without an expensive additional appeal to the Supreme Court.”

David Blake, deputy attorney general for legal policy said, “We will be discussing the case with our client but we expect to seek Supreme Court review.”

The plaintiffs, who include some current state lawmakers such as Sen. Andy Kerr, D-Lakewood, and House Majority Leader Dickey Lee Hullinghorst, D-Boulder, claims that TABOR deprives them of their ability to perform the “legislative core functions of taxation and appropriation.” Moreover, the plaintiffs say explicitly that TABOR prevents them from doing their jobs.

Lynn Bartels: 303-954-5327, lbartels@denverpost.com or twitter.com/lynn_bartels

http://www.denverpost.com/news/ci_26196416/colorado-ag-loses-another-round-from-court-appeals

Jul 10

TABOR Committee & TABOR Foundation update

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Friends of the Taxpayer’s Bill of Rights,

Your TABOR Committee has a lot of irons in the fire, so I thought to take inventory:

The lawsuit alleging TABOR unconstitutional is Kerr vs. Hickenlooper.  You might recall that a 3-judge appellate panel of the federal 10th Circuit found the trial could proceed.  In a direct and forceful response, the Attorney General’s Office asked for an appellate review by the entire Court (“en banc”).  From the opening salvo:

This case involves questions of exceptional importance: whether three state legislatorsmay enlist the federal judiciary to take sides in their dispute with the state’s constitution, its governor, and its people over the proper role of direct democracy. A case involving more fundamental issues about the proper role of the federal courts in a system of horizontally and vertically divided power is hard to imagine. If the panel decision stands, this Circuit will be alone in giving federal judges the power to decide that some laws are unconstitutional because they are too democratic.

The panel reached two holdings, each of which is unique among the circuits and conflicts with Supreme Court precedent….. Continue reading →

Mar 22

A fee or a tax? Guarding TABOR against lawsuits

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By Brian Vande Krol 

Guest Commentary

TABOR author Douglas Bruce collects political signs to be placed in high traffic areas of Colorado Springs rebuffing efforts against Referendum C, amending

TABOR author Douglas Bruce collects political signs to be placed in high traffic areas of Colorado Springs rebuffing efforts against Referendum C, amending TABOR, in November 2005. (Chuck Bigger, Special to The Denver Post)

 

 

To fee, or not to fee. That is the question.

Whether ’tis Nobler in the wallet to suffer

The Fees and Enterprises of outrageous Governance,

Or to file suits against CBE,

And by opposing end them?

A Colorado organization has filed an appeal to overturn a Denver District Court finding about the Taxpayer’s Bill of Rights (TABOR). We believe the trial court erred in finding that Colorado’s Bridge Enterprise (CBE) conforms to TABOR.

In 2010, the legislature created the CBE 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 (up to $1 billion).

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. Known as the bridge safety surcharge, it 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 functioned like a tax, which requires 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 tax election.

In 2012, the TABOR Foundation sued to reverse the tax and stop the issuance of more debt, arguing 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. Continue reading →

Mar 17

The Court of Appeals’ Anti-TABOR Decision

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The Court of Appeals’ Anti-TABOR Decision

March 17, 2014 by Rob Natelson

041410 Rob Natelson-2The U. S. Court of Appeals for the Tenth Circuitrecently refused to dismiss the suit by various public sector interests to invalidate Colorado’s Taxpayer Bill of Rights (TABOR). The plaintiffs claim that TABOR violates Article IV, Section 4 of the U.S. Constitution. That provision is called the Guarantee Clause because it guarantees that the states will have republican forms of government.

However, the Court of Appeals addressed only standing and justiciability issues, and allowed further hearings on the Guarantee Clause issue.

The Guarantee Clause was designed to prevent states from becoming monarchies, dictatorships, or anarchies. It is totally inapplicable to TABOR,which simply requires that certain conditions—such as popular votes or legislative supermajorities—be met before the legislature can make designated increases in taxes, spending and debt. Although it is common in Colorado to claim TABOR is “unique,”  in fact, it is only one of the stronger fiscal-restraint provisions that appear in the constitutions of 49 states. (The exception is Vermont.)

Restraints of this kind are called “TELs”—tax and expenditure limitations. Even the U.S. Constitution imposes such restraints on Congress. For example, it requires direct taxes, other than the income tax, to be apportioned among states by population, and it imposes a flat ban against taxes on exports. Continue reading →