Category Archives: Legal Issues

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 →

Mar 15

Their Power

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Paul Jacobs pictureTheir Power

Boo hoo.

Thirty-three hifalutin members of Colorado’s political elite — state legislators, former legislators, board of education officials, city and county politicians, and assorted insiders — are whining as plaintiffs in what’s called a federal case.

Why? They lost an election … in 1992! Now, as the federal 10th Circuit Court of Appeals put it, “Plaintiffs claim that they have been deprived of their power over taxation and revenue.”

Over 22 years ago, Coloradans petitioned the Taxpayer Bill of Rights onto the ballot and voters passed it. Known as TABOR, the constitutional amendment limits the growth of government spending, unless voters approve higher spending levels. It also requires voter approval for tax increases, except in an emergency. The politicians objected at the time, but have since lacked both the courage and the democratic sensibility to take the issue back to the people.All this by routine.

Instead, they’re suing to overturn the result. Continue reading →

Mar 15

Colorado residents may get a refund for pot tax

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Why this pot business deodorizes its cash 

Why this pot business deodorizes its cash
NEW YORK (CNNMoney)

Colorado residents could see some green in their pockets thanks to the new recreational marijuana taxes.

Budget advisers to the state legislature crunched the numbers and revealed the state could be forced to refund as much as $100 million to taxpayers.

The state’s Taxpayer Bill of Rights, known as TABOR, sets limits on taxes and government spending. If the government collects more than expected, it generally owes taxpayers a refund.

But Colorado taxpayers shouldn’t expect a refund check in the mail. The state has several other procedures to handle a refund.

The state could provide taxpayers a credit on the next year’s tax bill, for example, or reduce the sales tax. Continue reading →

Mar 14

The Tenth Circuit’s Punt in Kerr v. Hickenlooper Opens the Door for a Torrent of Litigation

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In 1992 the people of Colorado voted to amend their Constitution with adoption of a Taxpayer Bill of Rights (TABOR). This was a historic initiative that put the power in the hands of the people to decide for themselves whether to approve new taxes or tax-hikes. While many states have constitutional protections to prevent new or increased taxes—such as California’s requirement of a supermajority vote in the legislature—Colorado’s TABOR was unique in that it made the citizens of the state the final word on new taxes or increased taxes. TABOR therein served as a model that has been implemented through constitutional amendments in other states, and which NFIB has supported as a means of protecting small business owners from new and ingenious taxing schemes. But TABOR is under attack—and this may have profound implications, not only in Colorado but throughout the country.

TABOR’s Legal Challenges

TABOR was upheld as constitutional in the Colorado Supreme Court last year in the face of a lawsuit advanced by educators and the parents of school-aged children who complained that TABOR makes it harder for schools to get necessary funding. NFIB Small Business Legal Center filed in that case to defend the law, and we were pleased to see the Court ultimately affirm the constitutionality of TABOR. But TABOR faces yet another challenge—this time in federal court. Continue reading →

Mar 13

Colorado legislators grapple with pot-tax refund issue

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Colorado lawmakers on the Joint Budget Committee expressed frustration Wednesday that even though the state’s voters approved taxes on retail marijuana sales as required under the Taxpayer’s Bill of rights, some of that revenue might have to be refunded under TABOR if more taxes are collected than officials estimated.

JBC staff delivered a 100-page report to legislators outlining most of the scenarios that could occur of if the state collects more than the official $67 million estimate for the first full fiscal year of recreational pot sales, from July 1, 2014, through June 30, 2015.

That estimate was given to voters in the official voters pamphlet — known as the Blue Book — last fall, which explained Proposition AA, the new taxes established for retail marijuana sales. That booklet estimated likely revenue from new pot taxes at $67 million in the first full year. (The ballot language itself pegged predicted tax revenue at $70 million.)

Most current estimates, however, show the state will likely collect far more than $67 million.

The report outlines three courses of action:

– Wait to see how much tax is collected, then ask voters to let the state keep any excesses;

– Send a refund of any taxes collected above the estimate; or,

– Attempt to reduce the 15 percent excise tax on wholesale sales and 10 percent special sales tax in order to keep the amounts collected under $67 million.

“This is a bizarre result that we’d have to refund all that tax money just because what we asked for [was an estimate] in a year when this is going to be a growing industry,” said JBC Vice Chairman Sen. Pat Steadman, D-Denver, at a meeting of the budget panel Wednesday.

“It’s been the will of the people who passed TABOR,” said JBC Chairwoman Rep. Crisanta Duran, D-Denver. Continue reading →

Mar 13

House Minority Leader Statement on TABOR Ruling

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FOR IMMEDIATE RELEASE Contact: Joel Malecka

March 11, 2014 (o) 303-866-5679 (c) 970-581-3302

House Minority Leader Statement on TABOR Ruling

Denver –Today, following the 10th Circuit Court of Appeals’ ruling on a lawsuit challenging the constitutionality of the Colorado Taxpayer Bill of Rights (TABOR), House Minority Leader Brian DelGrosso (R-Loveland) issued the following statement:

“The Taxpayer Bill of Rights, particularly the requirement that voters’ approve all tax increases, provides vital protection to Coloradans from the tax-and-spend Democrats’ dream of unlimited
spending,” said DelGrosso. “It’s unfortunate that the lawsuit will continue, but I am not surprised these Democrats, which include House Democrat leadership, want to overturn TABOR. They believe they know what’s better for you than you do and without TABOR’s protection will be able to raise your taxes without your consent.”

House Republicans statement on TABOR ruling

Mar 12

High court may review TABOR law

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Justice Kennedy would be seen as swing vote in case

Gov. John Hickenlooper has to decide whether to go to the Supreme Court to defend the Taxpayer’s Bill of Rights, a law that many of his fellow Democrats would like to overturn.

Hickenlooper

Hickenlooper

The Denver-based 10th Circuit Court of Appeals ruled Friday that a lawsuit against TABOR can proceed. Attorney General John Suthers had argued that the lawsuit is a political question that the courts have no business deciding.

The state has the option to appeal to the U.S. Supreme Court or to the full 10th Circuit Court of Appeals. A three-judge appeals court panel handed down Friday’s ruling.

“We are currently reviewing the ruling and will then discuss the matter with our client before taking any next steps,” said Suthers’ spokeswoman, Carolyn Tyler.

Colorado voters adopted TABOR in 1992, stripping the power to raise taxes away from the Legislature. The lawsuit claims that TABOR violates the U.S. Constitution’s guarantee to every state of a “republican form of government,” where an elected body of representatives makes the laws.

Legal arguments in the case harkened back to the earliest days of the United States government, with arguments about what the framers of the Constitution would make of Colorado’s law.

No other state has an anti-tax law as strong as Colorado, and the case has attracted national attention. TABOR has been on the ballot in five other states, and 20 state legislatures have considered it, but it has always been rejected, said Nicholas Johnson, vice president of tax policy for the Center on Budget and Policy Priorities in Washington, D.C. The group was happy with Friday’s ruling.

“It’s important because legislatures need this authority. TABOR seeks to emasculate the Legislature,” Johnson said.

Richard Westfall, a leading Republican lawyer in Denver, filed a brief in defense of TABOR and argued that overturning it would open a “Pandora’s box” that could lead to similar challenges around the country.

But Mike Feeley, who argued the case for the plaintiffs, thinks Westfall is overstating the case. Continue reading →

Mar 11

House Minority Leader DelGrosso’s Statement on TABOR Ruling

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Denver –Today, following the 10th Circuit Court of Appeals’ ruling on a lawsuit challenging the constitutionality of the Colorado Taxpayer Bill of Rights(TABOR), House Minority Leader Brian DelGrosso (R-Loveland) issued the following statement:

“The Taxpayer Bill of Rights, particularly the requirement that voters’ approve all tax increases, provides vital protection to Coloradans from the tax-and-spend Democrats’ dream of unlimited spending,” said DelGrosso. “It’s unfortunate that the lawsuit will continue, but I am not surprised these Democrats, which include House Democrat leadership, want to overturn TABOR. They believe they know what’s better for you than you do and without TABOR’s protection will be able to raise your taxes without your consent.”

http://coloradohousegop.com/2014/03/house-minority-leader-statement-on-tabor-ruling/

Mar 10

Federal Appeals Court rules Colorado Anti-TABOR lawsuit can proceed

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Published March 7, 2014 | By CTBC Director

A three-judge panel on the Federal 10th Circuit Court of Appeals ruled Friday that a lawsuit challenging the Taxpayer’s Bill of Rights (TABOR) amendment to the Colorado Constitution may proceed, and remanded the case to federal district court to proceed to trial on the merits.

Byron White Courthouse 10th Circuit Denver

The appeals court ruling addressed only the issue of whether the plaintiffs (33 “educators” and legislators who are “mostly Democrats” with a few token “Republicans”) have legal standing to sue, and whether the lawsuit is barred by the “political question” doctrine, and explicitly did not address the merits (or lack thereof; the case has been widely derided as frivolous and groundless) of the lawsuit:

The merits of the case are not before us. We express no view on the substantive issues and intend none. We consider solely standing and the political question doctrine.  (Ruling at 6)

Establishing standing to sue requires, first and foremost, that the plaintiff “has suffered a concrete and particular injury in fact that is either actual or imminent” – which the court affirmed for the plaintiffs who are current or former legislators, since

Legislator-plaintiffs contend they have been injured because they are denied the authority to legislate with respect to tax and spending increases. (Ruling at 21)

The more significant element of the appeals court ruling addresses the “political question” doctrine – the issue of whether the claims brought by the lawsuit may properly be addressed by the courts at all.

 As a threshold matter, we must decide if the political question doctrine categorically precludesGuarantee Clause challenges against state constitutional amendments adopted by popular vote. (Ruling at 29)

The appeals court concluded that guiding U.S. Supreme Court precedent Continue reading →