Face the State

Face The State Staff Report

The Colorado Supreme Court, widely regarded as one of the most liberal in the country, has upheld a property tax increase that raised $118 million in its first year and was previously ruled unconstitutional by a Denver district court judge.

WestfallFTS Staff Photo

The 2007 School Finance Act, passed through that year's Senate Bill 199, contained a provision that froze the state's mill levy rates, the mechanism used to calculate property taxes. Before the legislation, the rates were rolled back as property values increased to ensure that property taxes remained flat. By freezing the mill levy rates, however, the legislation ensured that property tax revenue went up as property values increased.

Denver District Judge Christina Habas declared the freeze unconstitutional under the state's Taxpayers Bill of Rights, which requires voter approval of any change in tax policy that results in a net increase of government revenue.

Gov. Bill Ritter and the State Board of Education, defendants in the case, appealed the decision to the Colorado Supreme Court. After five months of deliberation, the court concluded that the mill levy rate freeze did not violate TABOR and overturned the lower court’s decision.

Chief Justice Mary Mullarkey wrote for the court’s majority and concluded that voters in 174 of 178 of the state's school districts approved “broadly worded ballot issues waiving the revenue limits of [TABOR].” Waiving TABOR limits is also known as de-Brucing, a term named after the amendment’s author former Rep. Douglas Bruce, R-Colorado Springs.

The plaintiffs' attorney, Richard Westfall, had argued that when voters de-Bruced they were promised their taxes would not increase. “The school boards asking for their 'yes' vote said this is not going to have any impact whatsoever on your property taxes,” he told reporters Monday.

Ritter praised the court’s decision. “As you know, the Colorado Supreme Court today ruled in the state's favor in what has become known as the 'mill levy' case,” he said in a prepared statement. “But the real winners today are Colorado's children, Colorado's families and Colorado's schools.”

Jon Caldara, president of the Independence Institute, disagreed. Caldara pointed out that while Ritter surrounded himself with children when he signed the legislation in 2007 and claims it is “for the children,” none of the funds are actually earmarked specifically for schools. The extra revenue from the mill levy rate freeze flows directly into the state's general fund.

Caldara ripped the decision, saying it would allow Ritter and other “tax and spend liberals” to redirect the money wherever they please. Caldara added that he was not entirely surprised by the high court's decision because it has a history of ruling against TABOR and acting in a very partisan manner.

Westfall also lamented the new standard set by the court for evaluating TABOR cases. In the Mullarkey’s ruling, she wrote that any case brought under TABOR “must be proven to be unconstitutional beyond a reasonable doubt.” According to Westfall, any legislative action potentially in violation of TABOR will now be subject to the highest scrutiny possible.