In an uncommon move, all judges on the U.S. Court of Appeals for the 10th Circuit will now review the nearly decade-long legal effort to declare Colorado’s Taxpayer Bill of Rights unconstitutional.
“I am eager to get past these procedural maneuvers so the court can review the profound issue raised by this case on the merits,” said former Rep. Claire Levy, D-Boulder, one of the plaintiffs. “Legislators and elected local government officials must be able to perform the most basic function of an elected representational democracy, which is to raise the revenue necessary to provide the services they are sworn to provide.”
Originally filed in May 2011, the lawsuit from state legislators, local elected officials and organizations alleged that the 1992 TABOR amendment violated the U.S. Constitution and the original grant of statehood to Colorado in 1875 because it deprived residents of a government that is “republican in form” by putting fiscal decisions in the hands of voters.
“A poll was called, and a majority of the non-recused active judges voted to rehear this matter en banc,” wrote the clerk of the court in an Oct. 14 order. En banc is the legal term indicating the participation of all appellate judges, rather than the three-member panels that typically hear cases. Between October 2018 and September 2019, the 10th Circuit only heard one case en banc out of more than 1,100.
The 10th Circuit had already ruled on the TABOR challenge in the past, most recently in a July 22, 2019 opinion that found the political subdivisions of the state — the eight school boards, one county commission and one special district, in the lawsuit — did meet the legal criteria to sue.
“This case is rife with difficult issues, and we applaud the district court for its attempts to ‘don waders’ and generate some cognizable structure out of the sludge,” wrote Senior Judge Stephanie K. Seymour for the majority on the three-member panel.
Gov. Jared Polis, whose administration is defending TABOR in the lawsuit, requested the en banc hearing in September 2019. The 10th Circuit asked for responses to specific questions from all parties revolving around the plaintiffs’ standing to sue.
“Federal courts are not the right place to resolve disagreements between a state and its school districts, special district boards, and boards of county commissioners about how a state has set economic policy,” the Polis petition to the 10th Circuit reads. “Those complaints are better addressed to the ballot box, not the courtroom.”
The definition of a republic indicates citizens hold power through their suffrage, which they then use to elect representatives who govern. The plaintiffs argued that a republican form of government requires a “fully effective legislature.” As such, TABOR interferes with the General Assembly’s duties by limiting its taxation power.
Previously, U.S. District Court Judge Raymond P. Moore ruled that individual state legislators or local officials did not have standing to challenge TABOR. Local governments did have a financial injury from TABOR because the amendment required them to spend money putting issues before voters, Moore conceded. However, they lacked the right to sue over TABOR because the 1875 Colorado Enabling Act granted a republican form of government to the “people of Colorado.”
The appellate panel, reversing Moore, determined it was necessary to first proceed with the case to answer whether that guarantee even affected political subdivisions.
“Establishing who was intended to benefit from the Enabling Act’s ‘republican in form’ requirement necessarily begs the question of what a ‘Republican Form of Government’ is, which is the issue ultimately to be resolved if any court ever succeeds in reaching the merits of this case,” wrote Seymour. She added that the meaning of the phrase was too uncertain to warrant a dismissal of the case on jurisdictional grounds.
TABOR prevents state and local legislative bodies from imposing new taxes or raising existing ones, instead requiring voters to approve the change. The amendment also imposed revenue limits and refunds to taxpayers in certain circumstances.
Judge Jerome A. Holmes dissented from the appeals panel’s decision, siding with the lower court that the republican form of government requirement is not directed toward “protecting or specifically providing rights to Colorado’s political subdivisions.”
He cited a 2011 decision from the 10th Circuit arising from Hugo, Okla., in which a similar 2-1 panel vote found the city could not sue the Oklahoma Water Resources Board under the U.S. Constitution for its water allocation decisions.
Attorneys for the plaintiffs declined to comment on the 10th Circuit’s recent order. The governor’s office did not immediately respond to a question about why he continues to defend TABOR, despite the wish of many in his party to see it overturned.
“I hope the Polis administration only sought en banc review because he perceived it to be his duty to defend the Colorado Constitution as it currently exists,” said Levy, the former legislator.
In the state's petition arguing for the en banc hearing, Attorney General Phil Weiser wrote that school districts, counties and special districts cannot take their states to court unless Congress grants a particular right.
The Colorado Association of School Boards and Colorado Association of School Executives previously submitted briefs in favor of invalidating TABOR, writing that the amendment doubled the per-pupil spending gap between Colorado and the national average. However, they contended that school districts suffered from more than a lack of money, and instead could not fulfill their own duties under the state constitution with inadequate resources.
In addition, the public interest Mountain States Legal Foundation and the Colorado Union of Taxpayers Foundation asked the 10th Circuit to affirm the lack of standing, saying that a republican form of government did not inherently include the power to tax.
"In reality, TABOR reflects the will of the same people whom the Political Subdivision Plaintiffs purport to represent, and merely imposes some minor checks on the Political Subdivision Plaintiffs’ statutory taxing power," the organizations wrote.
The case is Kerr v. Polis.