Exactly 10 years after a group of local and state elected officials first filed a legal challenge to Colorado’s most celebrated — and vilified — constitutional provision, the entirety of the Denver-based federal appeals court will now consider whether to pull the plug on that fight.
On Monday, the U.S. Court of Appeals for the 10th Circuit, which hears appeals from Colorado and five surrounding states, will hold a rare all-judges hearing, known as an “en banc” review, of the lawsuit seeking to overturn the state’s Taxpayer Bill of Rights. Although appellate courts typically issue decisions in panels of three judges, the 10th Circuit in October granted en banc review of the TABOR case.
Such hearings are highly atypical: from October 2018 through September 2019, the 10th Circuit only heard one case en banc out of more than 1,100.
There are 12 authorized judgeships on the 10th Circuit that require presidential nomination and U.S. Senate confirmation. However, only nine judges will participate in the en banc panel: five who were nominees of Democratic presidents and four who were Republican nominees.
The diminished number is the result of two Clinton administration appointees retiring from active status earlier this year. One of them, Senior Judge Mary Beck Briscoe, will join the en banc hearing. In addition, of the 10 remaining active judges, Scott M. Matheson Jr., a nominee of President Barack Obama, and Joel M. Carson III, a nominee of Donald Trump, have each recused themselves.
TABOR, a 1992 constitutional amendment, limits the amount of revenue the state can collect and spend, and requires voter approval for new taxes and tax rate increases. The amendment also provided a mechanism to refund revenue collections to taxpayers in excess of a formula based on inflation and population growth. Colorado refunded nearly $3.5 billion in the quarter-century since TABOR’s passage.
“For the past 25 years, Colorado has held a unique position as the only state that restricts itself to governing by the TABOR formula. We’ve succeeded in many ways in spite of that, and been set back in many others,” wrote the Colorado Fiscal Institute, which opposes the TABOR amendment, in 2018.
According to the nonpartisan civic group Building a Better Colorado, TABOR has helped maintain low state-level taxes and expenditures relative to the size of the state’s economy. But at the same time, Colorado has some of the least competitive teacher salaries and lowest per-pupil spending of any state. Transportation spending per person has also declined by 45% since 1991.
Progressives have complained about the need for additional state dollars for roads, K-12 education and higher education. In 2019, legislative Democrats pushed for passage of Proposition CC, which would have allowed the state to spend all TABOR refunds in those areas.
“These refunds may be $37 for the average Coloradan, but they’re a windfall for the wealthiest — closer to $1,000, reimbursing them more for just having more money,” argued then-House Speaker KC Becker, D-Boulder. The proposition lost at the ballot by a margin of 46% to 54%.
Against that backdrop, nearly three dozen elected officials in Colorado filed a lawsuit in May 2011, asking the federal courts to declare TABOR unconstitutional. The amendment, they contended, violates the U.S. Constitution’s guarantee of “a Republican Form of Government” to each state, a guarantee included in the 1875 Enabling Act that admitted Colorado into the Union. The plaintiffs interpreted a republican form of government to mean one in which an elected legislature makes taxing and spending decisions.
During the course of the proceedings, the 10th Circuit determined the individual legislators did not have standing to sue, after which the plaintiffs added school boards, the Board of Commissioners of Boulder County and a special district board to the lawsuit.
Although a trial court judge determined those entities, as political subdivisions of the state, did not have legal standing either, a three-judge panel of the 10th Circuit reversed that finding in 2019 by a 2-1 decision.
The majority decided the question of whether political subdivisions could sue to overturn TABOR was tied closely to the issue of what a republican form of government is, requiring further analysis. Gov. Jared Polis and Attorney General Phil Weiser, both Democrats, appealed to the entire 10th Circuit.
A Weiser spokesperson pointed to a statement the attorney general made in 2019 asserting that local governments should resolve questions of law at the ballot box, not in federal court.
“Because federal law respects states’ autonomy to order their own internal affairs, it does not allow those political subdivisions to sue their states unless Congress specifically gave them rights,” wrote Weiser’s office in its briefs to the 10th Circuit. “The purpose of the Enabling Act was to authorize Colorado statehood, not to grant Colorado cities the right to challenge a particular allocation of state political power.”
In January, the General Assembly, with both chambers under Democratic control, requested unsuccessfully to join the lawsuit and cancel the planned en banc hearing, believing its participation would clearly provide legal grounding for the lawsuit to proceed. The nine judges on the en banc panel rejected that move in March.
The appeal to the 10th Circuit implicates two prior decisions from the six-state region. In the first case, the 1998 opinion in Branson School District RE-82 v. Romer found Colorado school districts were allowed to sue the state over the implementation of a constitutional amendment involving public school lands. However, in 2011, the 10th Circuit decided in Hugo v. Nichols et al. that the city of Hugo, Okla. could not sue the state's water resources board for an alleged constitutional violation.
"Far greater than the issue in Branson of a claim to a share of school lands revenues, the political subdivisions’ claim here reaches the core organizing principle of American representative democracy," wrote the plaintiffs in the TABOR case.
In addition to asking the en banc court to uphold the three-member panel's prior opinion, attorneys for the plaintiffs also asked that the General Assembly be allowed to join the case at the lower court level.
David E. Skaggs, a Democratic former state legislator and congressman from Boulder who now represents the plaintiffs, told Colorado Politics he could not estimate the revenue effects to Colorado that a repeal of TABOR may bring, and said the lawsuit was instead about the principle of representative government.