Category Archives: Taxes

Jun 08

Anti-TABOR lawsuit deserved latest setback in federal court

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Anti-TABOR lawsuit deserved latest setback in federal court

Cynthia Coffman picture

Cyrus McCrimmon, Denver Post file

Colorado Attorney General Cynthia Coffman is defending the state against a lawsuit regarding TABOR.

By The Denver Post Editorial Board |

June 7, 2016 |

The Taxpayer’s Bill of Rights has multiple flaws that this editorial page has documented repeatedly over the years while urging lawmakers and voters to fix them.

We’re also on record as recently as last month urging the legislature to adopt a budgetary mechanism to free up revenue that otherwise would have to be refunded under TABOR.

But our critique of TABOR doesn’t extend to questioning the right of voters to enact or defend it. The 5-year-old lawsuit arguing that TABOR violates the U.S. Constitution’s mandate that states have a “Republican Form of Government” is too strained and exotic for our taste. It deserved the setback it suffered last week in federal court.

The 10th U.S. Circuit Court of Appeals ruled that several Colorado lawmakers who are plaintiffs lacked legal standing to sue because they do not represent the General Assembly as a whole.

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

Jun 07

The Creation of a Colorado Charter School, Part Five

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EDITORIAL: The Creation of a Colorado Charter School, Part Five – Pagosa Daily Post News Events & Video for Pagosa Springs Colorado

The Creation of a Colorado Charter School, Part Five

We might mention a couple of noteworthy laws created in the early 1990s, here in Colorado. One of those laws — the Taxpayers Bill of Rights, better known as TABOR — was approved by Colorado voters as an amendment to the state constitution, in 1992. TABOR’s language attempts to restrain the growth of state and local government in Colorado by limiting spending increases. In general terms, TABOR ties the rising cost of government to inflation and population growth; increases in tax revenues that exceed the TABOR-defined limits must be refunded to the taxpayers.

A quick illustration. Between 1970 and 2000, the average value of a single family home in Colorado nearly tripled — when adjusted for inflation. (Source: U.S. Census. It more than tripled when inflation is included.) That meant that a government agency funded solely by property tax would be pulling in nearly three times as much revenue (adjusted for inflation) in 2000 as they were in 1970 — unless that agency had reduced its mill levy. (I’ve never heard of a government entity in Colorado voluntarily reducing its mill levy.)

This hypothetical government entity was not required to actually provide better service in exchange for this ‘natural’ increase in tax revenues. The extra money just flowed in, without anyone necessarily doing anything differently.

TABOR attempts to control this type of taxation growth. Colorado voters, meanwhile, can choose to increase their taxes voluntarily, to fund new local or state programs, whenever they get the urge — and in fact, that happens on a fairly regular basis. (Maybe not so often in Archuleta County.)

One of the government systems that’s funded largely by property taxes — and which might have seen its tax funding nearly triple between 1970 and 2000, had it not been for the passage of TABOR — is the state’s education system.

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

Jun 05

High Taxes Lack a Guarantee of Quality Services: See Detroit

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Welcome to Detroit signIt’s about how resources are managed

By JAMES M. HOHMAN | May 18, 2016

It is a common trope in Michigan and elsewhere that the path to state prosperity is to have high taxes and quality services, with Minnesota pointed to as the paragon. Yet high taxes do not guarantee quality services, as Detroit can attest.

Detroit has the highest effective property taxes in the country, according to the Minnesota Center for Fiscal Excellence’s 2014 property tax study. For commercial property at all different values, Detroit is No. 1 in the nation. For homesteaded property, only Bridgeport, Connecticut surpasses Detroit. Detroit also has the highest property taxes for most values of industrial property. Only New York City has higher property taxes on apartments than Detroit. All of these rates are higher than those in Minneapolis. The one saving grace for property taxpayers in Detroit is that the net tax burden has decreased with the collapse in real estate values in the city. Continue reading →

May 24

Two Decades of Colorado’s Taxpayer’s Bill of Rights (TABOR)

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Executive Summary:
Over two decades have passed since 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. This Issue Paper analyzes TABOR’s effect on state government spending and taxes by examining three decades: The 1983-92 pre-TABOR decade; the first decade of TABOR, 1993-2002; and the second decade, 2003-12. The final decade included the largest tax increase in Colorado history, enacted as Referendum C in 2005. Decade-2 was also marked by increasing efforts to evade TABOR by defining nearly 60% of the state budget as “exempt” from TABOR.

Conclusion:

Tax-and-Spending Limitation Results

The Taxpayer’s Bill of Rights Amendment has worked well to achieve its stated intention to “slow government growth.”  Although government has still continued to grow significantly faster than the rate of population-plus-inflation, the Taxpayer’s Bill of Rights did partially dampen excess government growth.  It did not cut or reduce reasonable government growth.

In terms of economic vitality, Colorado’s Decade-1 was best for Colorado.  Unlike in the pre-TABOR decade, or in TABOR Decade-2 with its record increase in taxes and spending, because of Referendum C, Colorado’s first TABOR decade saw the state economy far outperform the national economy.

http://www.i2i.org/wp-content/uploads/2015/01/IP-4-2016_b.pdf

 

Two Decades of Colorado’s Taxpayer’s Bill of Rights (TABOR)

May 22

GUEST COLUMN: Say “no” to a special session

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GUEST COLUMN: Say “no” to a special session

By: Michael Fields

May 21, 2016

AFP Michael Fields

Not even 48 hours after the legislative session ended, the governor floated the idea of convening a special session to address the hotly debated hospital provider fee.

This drumbeat has continued in the press, with pressure from countless special interest groups who didn’t get their way during the normal 120-day session. And this all comes after the Senate Finance Committee voted down a bill to move the $750 million hospital provider fee into a separate enterprise fund for the second year in a row.

Proponents of this move want you to believe that to fix roads and help schools, this budget gimmick is desperately needed. They have grabbed onto compelling buzzwords, cleverly invoked as rationale to adopt this plan. These messages are used to pull on people’s heart strings and convince them that enterprising the hospital provider fee would somehow fix our transportation and education needs. The fact is creating this enterprise would be an end-run around our Taxpayer’s Bill of Rights (TABOR) and would not fix our long-term funding problems.

To fully understand what has been going on with our state budget, let’s look at a few numbers:

– The state budget has gone from $19 billion to $27 billion in just seven years. Continue reading →

May 13

GOP: Hospital fees under TABOR

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GOP: Hospital fees under TABOR

By Charles Ashby
Tuesday, May 10, 2016

DENVER — Even though it had near universal support outside of the Capitol, Republicans in a Senate committee Tuesday killed a measure that some had hoped would free up money for schools and transportation without raising taxes or fees.

The Senate Finance Committee, on a party-line 3-2 vote, killed a measure to turn the state’s hospital provider fee program, which funds health care programs for the poor, into a state-run government enterprise.

Doing so would free up about $750 million under the revenue caps mandated by the voter-approved Taxpayer’s Bill of Rights, something the 1992 constitutional amendment expressly allows.

But Republicans in the GOP-controlled committee said the idea flies in the face of TABOR’s spending limits, saying it would allow for unlimited growth when it comes to Medicaid spending.

“I do believe it is a major cash transfer, and I believe it was set up accordingly so that it would not come under the strong scrutiny of the voters of Colorado,” said Sen. Tim Neville, R-Littleton, who chairs the committee. “I believe that was not by accident.”

The issue has been a major theme of the 2016 legislative session, which ends today.

It actually started at the end of last year’s session when Gov. John Hickenlooper proposed taking the program out from under TABOR, in part because it’s a fee paid by hospitals and not taxpayers.

or 

Continue reading →

May 13

Call a special session

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Call a special session | GJSentinel.com

Call a special session

By The Daily Sentinel
Wednesday, May 11, 2016

One of the bigger disappointments of the current legislative session, which ends today, is that Senate Republicans dodged taking any action on the contentious hospital provider fee.

The House passed two bills, 1420 and 1450, which would have converted the fee to an enterprise, thereby freeing up space under the revenue cap set by the Taxpayer’s Bill of Rights. Getting the fee out from under TABOR would have allowed $750 million to be directed toward transportation and education and helped backfill some of the $362 million in severance taxes that lawmakers have used to cover spending gaps since 2006.

Senate leaders delayed introducing the bills until Tuesday, thus assuring they wouldn’t get the required number of readings needed to pass before the sessions ends.

Several Republicans broke ranks to support the House measures, so it would have been instructive to hear arguments in the Senate. In an election year, voters deserve to understand the rationale behind fiscal policy positions and who’s taking them.

Early on, some Republicans argued that converting the fee eliminated refunds to taxpayers. But budget negotiations removed that scenario from the equation. In a parallel universe, funding for roads and schools without a tax increase sounds like something the GOP would get behind.

“I don’t quite understand a lot of my fellow Republicans saying, ‘Oh, we have to preserve TABOR,’” John Suthers told The Colorado Independent last week. “The easiest way to preserve TABOR, and not increase taxes, is to remove the provider fee from the calculation. But obviously there’s a group in the Senate that feels differently.”

In 2009, Suthers, who was then Colorado’s Republican attorney general, urged lawmakers to make the new fee an enterprise. The current attorney general, Republican Cynthia Coffman, says converting it now is perfectly legal.

 

Continue reading →

May 13

PLF files brief in Colorado Taxpayer’s Bill of Rights case

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PLF files brief in Colorado Taxpayer’s Bill of Rights case

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The Colorado Department of State requires companies to pay a business and licensing charge for filing various statutorily mandated corporate documents. The Department considers this charge to be a fee. But most of the money raised from the charge is not used to defray the cost of providing the business and licensing services, the classic purpose of a fee. The lion’s share of the business and licensing charges go to the Department’s Cash Fund, and less than 15% of the Fund is used to defray the cost of operating the Business and Licensing Division. Because most of the money raised from the business and licensing charge is used to provide the Department of State’s general services, it has all of the hallmarks of a tax, and should be labeled as such.

Colorado courts examine three factors to determine whether a charge is a tax or fee: (1) the language of the enabling statute; (2) the primary purpose for which the money is raised; and (3) whether the primary purpose of the charge is to defray the cost of services for those who must pay it. The District Court of Denver concluded that while the first two factors support characterizing the business and licensing charge as a fee, the third factor did not because the primary purpose was not to defray the cost of providing business and licensing services. Unfortunately, the court did not explain how it would consider the factors in this balancing test, instead concluding that TABOR did not even apply to the business and licensing charge.

PLF’s brief raises two points. First, we argue that Colorado courts should apply a presumption that TABOR applies to all charges. Colorado voters made it clear that they wanted to limit government growth when they enacted TABOR. Colorado Courts would give effect to the Colorado voters intent by applying a presumption that TABOR applies. Second, we suggest that Colorado courts follow the footsteps of other state courts in conducting the balancing test that determines whether a charge is a tax or fee, by giving stronger consideration to the third factor—whether the charge is meant to defray the cost of providing a service to those who must pay it—and de-emphasizing the first factor which considers the label given to the charge. Indeed, if Colorado courts give too much weight to the government’s characterization, governments will have a perverse incentive to mislabel charges to avoid TABOR’s requirements. Under this test, the business and licensing charge is clearly a tax. Thus, the charge would illegal because it was not submitted to the voters.

PLF files brief in Colorado Taxpayer’s Bill of Rights case

May 13

7 winners and losers: Breakdown of the 2016 Colorado legislative session

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7 winners and losers: Breakdown of the 2016 Colorado legislative session

By: Megan Schrader

May 11, 2016 Updated: May 11, 2016 at 10:45 pm

photo - Colorado State Capitol Building
Colorado State Capitol Building 

The 2016 Colorado legislative session may go down in history as the year of little change.

The politically divided chambers in the General Assembly resulted in neither party having much success with their lengthy agendas.

That’s not necessarily a bad thing for political moderates or independents who don’t care about party agendas, but for everyone else, they’ve got something in the loss column this year.

That means 2017 won’t see major policy changes on things like clamping down on construction defects litigation or equal-pay legislation.

Here is a look at some of the winners and losers from the session, which concluded Wednesday:

WINNERS

The Joint Budget Committee

Any politician who can emerge from 120 days of politicking and still look like a high-functioning, level-headed individual. The three Democrats and three Republicans on the Joint Budget Committee received more than their share of accolades for crafting a 581-page budget that somehow managed to appease both sides. Sen. Kent Lambert, R-Colorado Springs, and Rep. Millie Hamner, D-Dillon, led the committee to a $25.8 billion budget that averted major cuts and – perhaps more significantly – the gridlock all too common across the nation when politicians dig in their heals.

Continue reading →

May 10

Colorado roads debate still hanging with session ending

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Colorado roads debate still hanging with session ending

By THE ASSOCIATED PRESS • May 10, 2016

The Democrat-led House passed a complicated plan to direct more state revenue to transportation — as much as $700 million over the next five years. The Republican-led Senate passed a last-minute bill that could issue $3.5 billion in bonds to fund road construction.

Neither has been taken up by the opposite chamber, and truckers, commuters and chambers of commerce are frustrated with the standstill.

“We can ill afford to have this delayed any further,” said Greg Fulton, president of the Colorado Motor Carriers Association. Fulton estimates his association’s trucking members lose $1 million every day in the metropolitan area because of traffic delays and equipment repairs made necessary by poor roads.

Overall, the Colorado Department of Transportation says it needs $1 billion more every year to maintain and build roads to meet the needs of more than 7.3 million residents by 2040. It devotes most of its $1.4 billion budget to maintenance.

Voters haven’t increased the 22-cent-per-gallon state gasoline tax in more than 20 years. It and the federal gas tax provide more than half CDOT’s revenue.

Republicans favor bonding, not new taxes, to pay for critically needed road improvements. They note that Colorado’s last major highway improvements, including the Denver-area T-Rex project, were paid for by bonds. Their bill would ask voters to approve the new bonds.

Democratic House Speaker Dickey Lee Hullinghorst insists there’s not enough revenue to back new bonds, which would require up to $5.5 billion over 20 years. She wants to boost spending by removing a multimillion-dollar Medicaid fee from the Taxpayer’s Bill of Rights, known as TABOR.

Continue reading →