Aspen settles food-tax suit | AspenTimes.com

Aspen settles food-tax suit

Janet Urquhart
Aspen Times Staff Writer

Aspen has settled a lawsuit challenging its food-tax rebate program for $5,000, according to City Attorney John Worcester.

The deal means city residents are no longer in danger of losing their ability to file for the $50 rebate every spring, though Worcester expressed confidence that the rebate program would have been upheld in court.

“I consider it a win for the city,” he said Thursday.

District Court Judge Thomas W. Ossola upheld the rebate program as legal in a ruling last June, which led to an appeal to the Colorado Court of Appeals in Denver. With a reply to a city brief in the case due in the appeals court on Tuesday, the plaintiffs apparently decided they’d had enough of the litigation.

Their attorney called Worcester and offered a deal.

“He called and said his clients didn’t want to pursue the case and said they were willing to drop the whole thing for $5,000,” Worcester said. “We’d already won at the District Court level. I think they just ran out of steam.

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“I think it’s safe to say they just wanted out of the lawsuit.”

Moses Garcia, a Denver attorney representing the plaintiffs, could not be reached for comment yesterday.

Worcester said he checked in with three City Council members and the city’s insurer and received the go-ahead to settle the suit.

“I guess the bottom line is, though we figured there was a very good likelihood that we would ultimately prevail, if this case continued, it would be a number of years out,” Worcester said.

And, there was always the slim risk that the city would lose, potentially exposing it to a class-action claim, and that the rebates would disappear, he added.

“It’s a very popular program, and I think a lot of people were concerned about it. This eliminates that uncertainty,” Worcester said.

The food-tax rebate program began in 1970 as an enticement to get voters to pass a sales tax.

Jon Ronay of Basalt and Steve Martino of Alabama, along with a third party who later dropped out as a plaintiff, filed the lawsuit in 1999. The suit claimed the rebate program is unconstitutional and that the city discriminates against nonresidents who buy goods in Aspen and pay the tax, but have no access to the refund.

In upholding the rebates in District Court, Judge Ossola wrote: “In this case, Aspen has shown a substantial justification for the difference in treatment between its year-round residents and the nonresidents. Whereas the visitors to Aspen can choose where to spend their money, the residents have to travel outside Aspen to reduce their expenses for necessities, like groceries.”

This year, the city paid out $153,050 in rebates, mostly in $50 increments, though senior citizens qualify for $150. In all, roughly 2,900 people received the rebates, according to the city’s finance office.