Colorado high court to hear challenge to tax freeze
September 10, 2008
DENVER ” Colorado’s Supreme Court will hear oral arguments Thursday on a challenge to a law that freezes residential property taxes to increase funding for public education.
Gov. Bill Ritter is appealing a district court ruling that the 2007 law is unconstitutional, and fellow Democrats say it stabilizes property taxes. Republicans call it a tax increase that requires voter approval.
By freezing tax rates in school districts where they were expected to decline, the state expected to raise $1.7 billion for education over the next 11 years. In its first year, school districts were allowed to keep $118 million in property taxes that would otherwise have been refunded under the Taxpayer’s Bill of Rights, or TABOR.
In June, Republican lawmakers served notice that if the court declares the law unconstitutional but allows school districts to keep money they’ve already collected, they would introduce legislation to return the money to taxpayers. They also asked Ritter to set money aside to cover any adverse ruling. Ritter refused, saying he believes the state will win on appeal.
“It’s a plain reading of the state Constitution, and we believe very strongly this was a tax policy change that led to an increase in tax revenue,” said plaintiffs’ attorney Richard Westfall.
Attorney Mark Grueskin, who represents Ritter and the state, said a lot is at stake.
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“Obviously it’s a big case. It’s important for the state, it’s important for the 134 school districts affected by it,” said attorney Mark Grueskin, representing Ritter and the state.
Mesa County, a business owner and four taxpayers filed the original suit against the Department of Education and Ritter. They were helped by the conservative Independence Institute think tank. It asks the state to pay back the money, even though it has been spent by the school districts.
Denver District Judge Christina M. Habas ruled in May that the revenue should have been approved by Colorado voters under TABOR, a state constitutional amendment that limits taxes and spending.
Habas rejected the state’s argument that the education finance law redistributes revenue rather than raising it. She refused to order the state to pay it back, saying she doesn’t believe the courts have that authority.