Mark Harden
Denver Business Journal
March 7, 2013

A lawsuit seeking to overturn Colorado’s restrictions on spending and taxation in the Taxpayer’s Bill of Rights can go forward and be tried on the merits of the case, the Denver-based U.S. 10th Circuit Court of Appeals ruled Friday.

The appeals court upheld a 2012 ruling by U.S. District Judge William Martinez that the 33 plaintiffs who filed the anti-TABOR case against the state have a right to sue, despite objections by state Attorney General John Suthers that the plaintiffs lack standing.

The ruling ( download here) sends the case back to U.S. District Court to proceed to trial. Suthers still has the option of appealing to the U.S. Supreme Court, but as of late Friday had not announced plans to do so.

The appeals court did not rule on the merits of the case, but merely on the issue of whether the plaintiffs have a right to sue.

“… The Supreme Court has held that members of a state legislature may have standing to sue in order to vindicate the ‘plain, direct and adequate interest in maintaining the effectiveness of their votes,'” Friday’s ruling says.

The suit — which names Gov. John Hickenlooper as defendant — was filed in 2011 as a challenge to TABOR, which voters passed in 1992.

The constitutional amendment requires a pubic vote for any tax increases, ties year-to-year spending increases to inflation and population growth, and mandates that revenue be refunded to taxpayers under certain circumstances.

The plaintiffs challenging the constitutionality of TABOR are a bipartisan coalition that includes four current state legislators, 13 other current officeholders, and several former state and local government officials.

They argue that TABOR deprives the Colorado General Assembly of a key legislative power — the ability to raise revenue. Because of that, the plaintiffs assert that Colorado no longer has a “republican form of government,” in violation of the U.S. Constitution and the federal statute that authorized Colorado to become a state.

“The thoughtful decision by the 10th Circuit Court of Appeals clears the way for a rigorous examination to determine whether Colorado retains a republican form of government,” saidMichael Feeley, a former Colorado Senate minority leader who is one of the attorneys representing the plaintiffs.

“This is the first time in the 227-year history of the U.S. Constitution that a federal court has been called upon to interpret the provision of the Constitution that requires each state to have and maintain a viable legislative branch in order to have a ‘Republican form of government’,” said Herbert Fenster, an attorney with McKenna Long & Aldridge LLP. “While this decision does not determine that issue, it establishes that the plaintiffs in this case have the right to litigate this issue on its merits.”

The National Federation of Independent Business filed a brief arguing against the suit last year. In a statement at the time, NFIB said that “overturning TABOR would open the floodgates for litigation against voter-enacted spending controls around the country, and undermine Colorado voters’ decision to keep government spending in check.”

Kelly Maher, executive director of the conservative advocacy group Compass Colorado, argued that without TABOR, the state Legislature might have passed a $1 billion tax hike for education on its own without the matter being submitted last fall as Amendment 66 to state voters, who soundly rejected it.

“If the plaintiffs [in the anti-TABOR lawsuit] had their way, rather than allowing a vote on Amendment 66, Colorado’s families would have had the billion dollar tax hike foisted on us against our will,” Maher said Friday.

But other groups have called for TABOR to be blocked or repealed, saying that it and other constitutional provisions have hogtied the Legislature and hampered its ability to deal effectively with changing economic conditions.