June 7, 2011

Lawsuit seeks to overturn TABOR

A lawsuit filed by a bipartisan plaintiff group seeks to overturn TABOR and return control of tax policy to the state legislature. The lawsuit, Kerr v. State of Colorado, claims that TABOR violates the U.S. Constitution by requiring voter approval of virtually every tax policy change. If the plaintiffs prevail, TABOR will be overturned and the power to change tax policy and increase taxes and spending will be returned to the General Assembly.

The lawsuit is brought by a bipartisan group of 34 plaintiffs, representing a cross-section of state legislators, local government officials and business leaders. The lead plaintiff, Andy Kerr, is a teacher in the Jefferson County School District and a Democratic member of the State House of Representatives. Four sitting school board members have also signed on as plaintiffs: Jane Barnes, Jefferson County; Bill Bregar, Pueblo 70; Stephanie Garcia, Pueblo 60; and Bruce Broderius, Weld County 6. The plaintiff group also includes Elaine Gantz Berman, a Democratic member of the State Board of Education; former Republican State Senator Norma Anderson, an expert in school finance; and former Democratic Representative Mike Merrifield, a retired music teacher and former chair of the House Education Committee.

TABOR requires, among other things, voter approval of any new tax, tax rate increase, mill levy increase or other tax policy change that results in a net tax revenue gain. TABOR ties the hands of state and local governments by making it impossible to respond effectively to changing economic circumstances.

The plaintiffs seek a ruling that TABOR violates Article IV, Section 4 of the U.S. Constitution, commonly referred to as the “Guarantee Clause,” which provides in relevant part that:

“The United States shall guarantee to every State in this Union a Republican Form of Government…”

The Constitution itself does not define Republican Form of Government. Plaintiffs argue that the Guarantee Clause requires each state to establish a government with essential powers exercised through a representative democracy of elected officials. One such essential governmental function is the power to raise and spend taxes. By requiring voter approval of any new tax, tax rate increase, mill levy increase, or other tax policy change, TABOR strips the General Assembly and its subordinate political subdivisions of an essential governmental function in violation of the U.S. Constitution.

Defenders of TABOR argue, on the other hand, that all legislative power is derived from the people. In their view, TABOR properly allows the citizens of Colorado to assert their authority to control taxes and spending.

CASB will continue to provide legal updates on the proceedings in this case. Please contact CASB Director of Member Legal Resources Michelle Murphy at 800-530-8430, 303-832-1000 if you have any questions regarding the information contained in this Legal Update.