TABOR Foundation
Colorado Car Tax (er, ‘FASTER’ vehicle registration “fee”) increase on trial this week
The Colorado Car Tax (er, “vehicle registration fee”) increase passed in 2009 (SB108, the so-called “FASTER” bill) is quite possibly THE most unpopular tax increase in Colorado history – made all the more repugnant by how it became law (exploiting a 2008 Colorado Supreme Court ruling which declared that “fees” don’t count as “taxes” to circumvent the constitutional requirement (under Colorado Constitution Article X, Section 20 – Taxpayer’s Bill of Rights, a.k.a. TABOR) to receive prior voter approval for any ‘policy change resulting in net revenue gain’ to the state).
After two years of legislative inaction failed to repeal or roll back the unconstitutional and unpopular tax increase, the ‘FASTER’ Colorado Car Tax was challenged in court as a violation of the Colorado state Constitution (specifically, Colorado Constitution Article X, Section 20 – Taxpayer’s Bill of Rights, TABOR).
That court challenge is on trial this week.
The court declined to grant Plaintiff’s Motion for Summary Judgment which was filed earlier this year, despite documenting the fact that the “”Colorado Bridge Enterprise” established under the FASTER legislation as a “TABOR-exempt business enterprise” (Ed. – see, “Life in the FASTER Lane – updates on the Colorado Car Tax“) fails to meet the constitutional standard to qualify for exemption from TABOR requirements.
Plaintiffs had the first shot at introducing and examining witnesses in the trial, which began Monday and continues into Wednesday (at least) this week.
Penn Pfiffner, in his capacity as Chairman of the TABOR Foundation and plaintiff, sent out an update to people on the TABOR Committee mailing list earlier today:
Five witnesses; two heroes.
Plaintiffs (us) get to go first. One central fiction to keep in mind is the scheme declares that as you drive over certain bridges on the highway system, you are paying tolls to do so; tolls which are collected through a “safety surcharge.” The first two witnesses were Ms. Chris Sammons and Willie Wharton who both explained that they had to register vehicles and therefore pay the bridge surcharge “fee,” although those specifically identified vehicles never cross a single bridge. They did you proud, providing testimony that was calm, convincing, certain, occasionally humorous, and very credible. To me, they are my newest heroes. Both took a day off, drove in from Grand County (think, from beyond the western border of Rocky Mountain National Park), leaving very early to get to Denver on time. Willie had to spend one of his vacation days to do so, and the trial managed to fall during the very busiest time of his professional year. Chris had to put aside the demands of her ranch and small businesses, and miss a school function for one of her two teenagers. These two deserve our special thanks.
Mr. Manley also called as witnesses the chief financial officer of the Colorado Department of Transportation (and “coincidentally” the chief financial officer of the Bridge Enterprise Fund) and the executive director of the Colorado Department of Transportation (and “coincidentally” of the Bridge Enterprise Fund). They had to answer his questions about how the supposedly separate entities operate and coordinate, and supply information about funding issues.
The final of the five witnesses did not conclude his testimony before business wrapped up yesterday, and that is where the trial was to continue from this morning. Paul Wingard was there to prove expert information about the values of the bridges. Any TABOR enterprise is limited to taxpayer subsidy of 10 percent of annual income. The calculated limit in this case is met only because most bridges were transferred from the Department of Transportation to the Bridge Enterprise at a value of zero. Mr. Wingard brings a rare combination of experience and talents to the discussion. He is a professional engineer who has consulted in that profession, is a licensed contractor who built bridges, served as a senior administrator for a road and bridge department of a county government in Florida, and has participated in arm’s-length transfers of tolled bridges and a highway. We found him through Reason Foundation’s Bob Poole. Paul submitted a report about the values of the Colorado bridges being transferred.
More on this important constitutional challenge as the situation develops.
Bottom Line:
Colorado taxpayers have been forced to pay literally $100 Million per year in additional ‘FASTER’ taxes (under the label of “fees”) while simultaneously becoming obligated for over $300 Million in debt – all without a vote of the people, as required under Colorado’s Constitution.
The lawsuit seeks to prevent “continued enforcement and maintenance of the bridge safety surcharge” (i.e. stop the illegal collection of a portion of the Colorado Car Tax) and require that “all “[r]evenue collected, kept, or spent illegally” be refunded” – as mandated under the Colorado Constitution.
Now THAT would be a welcome “tax refund” for all Coloradans.
Clear The Bench Colorado will, with your support, continue to promote transparency and accountability in the Colorado judiciary, informing the public to increase awareness of the substantial public policy implications of an unrestrained activism and political agendas in the courts. We will continue to work to educate voters and provide information of relevance related to the judicial branch, and to provide useful and substantive evaluations of judicial performance.
However, we can’t do it alone – we need your continued support; via your comments (Sound Off!) and, yes, your contributions. Freedom isn’t free -nor is it always easy to be a Citizen, not a subject.
Ultimately, though – it’s worth the effort.
The Colorado Car Tax – er, ‘FASTER’ “vehicle registration fee” increase – court challenge moves forward
The Colorado Car Tax (er, “vehicle registration fee”) increase passed in 2009 (SB108, the so-called “FASTER” bill) is quite possibly THE most unpopular tax increase in Colorado history – made all the more repugnant by how it became law (exploiting a 2008 Colorado Supreme Court ruling which declared that “fees” don’t count as “taxes” to circumvent the constitutional requirement (under Colorado Constitution Article X, Section 20 – Taxpayer’s Bill of Rights, a.k.a. TABOR) to receive prior voter approval for any ‘policy change resulting in net revenue gain’ to the state).
After two years of legislative inaction failed to repeal or roll back the unconstitutional and unpopular tax increase, the ‘FASTER’ Colorado Car Tax is being challenged in court as a violation of the Colorado state Constitution (specifically, Colorado Constitution Article X, Section 20 – Taxpayer’s Bill of Rights, TABOR).
The most recent development in the case (the ‘FASTER’ lawsuit was initially filed in May 2012) occurred last week with the filing of a ”Plaintiff’s Motion for Summary Judgment” in the case (a motion for summary judgment is filed based on the existing documentary record prior to trial claiming that all factual and legal issues can be decided in the moving party’s favor).
The Plaintiff’s Motion documents the fact that the “”Colorado Bridge Enterprise” established under the FASTER legislation as a “TABOR-exempt business enterprise” (Ed. – see, “Life in the FASTER Lane – updates on the Colorado Car Tax“) fails to meet the constitutional standard to qualify for exemption from TABOR requirements, on two main grounds:
A. The CBE Does Not Function As A Business Because It Has The Power To Levy A General Tax; and
B. The CBE Receives More Than Ten Percent Of Annual Revenue In Grants From CDOT
(including a $14.4M grant and the “gift” of 56 bridges from the Colorado Dep’t Of Transportation)
The Motion makes it crystal clear that the CBE “was created for the sole purpose of attempting to circumvent TABOR.”
Under FASTER, the CBE has forced Coloradans to pay “bridge safety surcharge” taxes approaching $100 million annually, without seeking the voter approval required by TABOR. See CBE 2010 Annual Report (“2010 Annual Report”) at 3.1 The CBE has also issued $300 million in new government bonds, again without a TABOR-required vote of the people. By taking these actions without a vote of the people, defendants have violated the rights of [Coloradans] to vote on the imposition of new taxes and debt, as guaranteed by TABOR.
The Motion further documents the self-evident statement that
The CBE is not a business enterprise exempt from TABOR because it generates revenue by levying a general tax, rather than by engaging in market transactions. TABOR-exempt enterprises may not levy taxes, because “[t]he ability to levy general taxes is inconsistent with the characteristics of a business.”
The purported “business” character of the CBE is belied by how it “makes” money:
The CBE’s revenue is not derived from “market exchanges taking place in a competitive, arms-length manner,” but rather from the bridge safety surcharge—a compulsory tax collected without regard to any benefits conferred to payers.
Calling the Colorado Car Tax a “fee” is also belied by the nature of how it is levied, on whom, and who “benefits” from the charge; calling it a “fee”
does not comport with reality because the surcharge shares none of the characteristics of a fee as defined by the Colorado Supreme Court and is not levied to provide “a specific service to the persons upon whom the fee is imposed and at rates reasonably calculated based on the benefits received by such persons.”
The surcharge is therefore a tax, and not a fee.
Colorado taxpayers have been forced to pay literally $100 Million per year in additional ‘FASTER’ taxes (under the label of “fees”) while simultaneously becoming obligated for over $300 Million in debt – all without a vote of the people, as required under Colorado’s Constitution.
The lawsuit seeks to prevent “continued enforcement and maintenance of the bridge safety surcharge” (i.e. stop the illegal collection of a portion of the Colorado Car Tax) and require that “all “[r]evenue collected, kept, or spent illegally” be refunded” – as mandated under the Colorado Constitution.
Now THAT would be a welcome “tax refund” for all Coloradans.
Clear The Bench Colorado will, with your support, continue to promote transparency and accountability in the Colorado judiciary, informing the public to increase awareness of the substantial public policy implications of an unrestrained activism and political agendas in the courts. We will continue to work to educate voters and provide information of relevance related to the judicial branch, and to provide useful and substantive evaluations of judicial performance.
However, we can’t do it alone – we need your continued support; via your comments (Sound Off!) and, yes, your contributions. Freedom isn’t free -nor is it always easy to be a Citizen, not a subject.
Ultimately, though – it’s worth the effort.
Colorado Legislators, CUT (Colorado Union of Taxpayers) file Amicus Brief opposing “Fenster’s Folly” frivolous anti-TABOR lawsuit
The frivolous, groundless, and vexatious politically-motivated lawsuit attempting to overturn a Colorado Constitutional Amendment (the Taxpayer’s Bill of Rights, colloquially known as “TABOR”) filed in Federal court in May 2011 – and, after several rounds of motions and counter-motions, allowed to proceed to trial in July 2012 (despite clear constitutional precedent disallowing challenges on the basis of the “Guarantee Clause”) – entered a new phase today with the filing of an Amicus (“friend of court”) brief in the state’s interlocutory appeal to the 10th Circuit Court of Appeals.
The Amicus Brief, filed by Colorado legislators and the Colorado Union of Taxpayers (CUT) in opposition to the frivolous Fenster lawsuit, challenges the plaintiffs’ (several anti-TABOR current and former state legislators) lack of standing to file, underlines the fact that the lawsuit’s claims present a “nonjusticiable political question” and highlights the importance of preserving the separation of powers that could be jeopardized by a court ruling striking down the TABOR constitutional amendment.
Some key points:
- The General Assembly’s power to propose taxes has always been subject to numerous constitutional limitations, qualifications, and exemptions.
- And the people retain ultimate veto authority over all acts of the General Assembly, including taxation and spending.
Id. art. V, § 1 (“The legislative power of the state shall be vested in the general assembly . . . but the people reserve to themselves the power . . . at their own option to approve or reject at the polls any act or item, section, or part of any act of the general assembly.”).
- TABOR’s primary restraint on the legislature is procedural, not substantive. … It is this element of democratic accountability and constitutional restraint that Plaintiffs challenge in this litigation.4
- The district court erred by determining that the claims here, all based on the Guarantee Clause, do not present a nonjusticiable political question.8
Where the Guarantee Clause is concerned, the Supreme Court has twice unequivocally shut the courthouse doors, in order to prevent “the inconceivable expansion of the judicial power and the ruinous destruction of legislative authority in matters purely political which would necessarily be occasioned by giving sanction to” Guarantee Clause claims in federal court. Pacific States Telephone & Telegraph Co. v. State of Oregon, 223 U.S. 118, 141 (1912); see also Luther v. Borden, 48 U.S. 1, 42 1849).9 The district court brushed aside these precedents because it considered them fact-bound. Neither opinion supports such a conclusion.10
- If the district court were to conclude that TABOR renders the Colorado Constitution unrepublican, that judgment “would necessarily affect the validity, not only of the particular statute which is before us, but of every other statute passed in [Colorado] since the adoption of [TABOR].” Pacific States, 223 U.S. at 141. The Constitution vests Congress with the sole authority to judge whether the Guarantee Clause has been satisfied in order to avoid the constitutional crisis that would result from enlisting the federal courts.
- The concept of justiciability, whether embodied in the standing or political question doctrines, is intended to preserve the separation of powers. … This fundamental concern about the “the proper—and properly limited—role of the courts in a democratic society,” Allen, 468 U.S. at 751, makes swift dismissal of the instant case critically important.
- The doctrine of separation of powers applies particularly to the judicial branch, preventing it from involving itself in potentially political disputes.
As previously noted, the lawsuit is lacking in legal merit, and constitutional case law precedent (including two relevant Supreme Court of the United States [SCOTUS] decisions, as also noted earlier) is clear that the “Republican form of government” language in the Constitution’s “Guarantee Clause” (United States Constitution, Article IV, Section 4 – “The United States shall guarantee to every State in this Union a Republican Form of Government“) is non-justiciable (meaning, not subject to determination by the courts). Constitutional constraints on government are, by definition, constitutionally allowed – failing to dismiss this clearly frivolous lawsuit would cost Colorado taxpayers hundreds of thousands in legal fees and costs, and will almost certainly ultimately end up before the United States Supreme Court since overturning a state constitutional amendment by judicial fiat would have immense implications for the citizens’ initiative process and the right of the people to limit government power by constitutional limits nationwide.
If “We The People” cannot set constitutional limits on government power, then the very founding principles of this nation – indeed, the foundations of Liberty itself – are at risk.
Reference state’s Motion to Dismiss Plaintiffs’ Substitute Complaint (which was filed back in August by Governor Hickenlooper and Attorney General Suthers – also, analysis of the state’s Motion to Dismiss).
Additional references:
A more detailed (and highly informative) discussion of the constitutionality of the citizen initiative and referendum processes may be found in the Texas Law Review article, “A Republic, Not a Democracy? Initiative, Referendum, and the Constitution’s Guarantee Clause” by Professor Robert G. Natelson.
Clear The Bench Colorado will, with your support, continue to promote transparency and accountability in the Colorado judiciary, informing the public to increase awareness of the substantial public policy implications of an unrestrained activism and political agendas in the courts. We will continue to work to educate voters and provide information of relevance related to the judicial branch, and to provide useful and substantive evaluations of judicial performance.
However, we can’t do it alone – we need your continued support; via your comments (Sound Off!) and, yes, your contributions. Freedom isn’t free -nor is it always easy to be a Citizen, not a subject.
Ultimately, though – it’s worth the effort.
The Colorado Car Tax – er, ‘FASTER’ “vehicle registration fee” increase – challenged in court as violation of state Constitution
The Colorado Car Tax (er, “vehicle registration fee”) increase passed in 2009 (SB108, the so-called “FASTER” bill) is quite possibly THE most unpopular tax increase in Colorado history – made all the more repugnant by how it became law (exploiting a 2008 Colorado Supreme Court ruling which declared that “fees” don’t count as “taxes” to circumvent the constitutional requirement (under Colorado Constitution Article X, Section 20 – Taxpayer’s Bill of Rights, a.k.a. TABOR) to receive prior voter approval for any ‘policy change resulting in net revenue gain’ to the state).
After two years of legislative inaction failed to repeal or roll back the unconstitutional and unpopular tax increase, the ‘FASTER’ Colorado Car Tax is being challenged in court as a violation of the Colorado state Constitution (specifically, Colorado Constitution Article X, Section 20 – Taxpayer’s Bill of Rights, TABOR).
Despite being a central issue in the 2010 elections (Democrat Governor Bill Ritter chose not to seek re-election in large part because of the tax increase’s unpopularity; Senate sponsor Dan Gibbs also chose not to seek re-election; and House Sponsor Joe Rice was defeated by now-Representative Kathleen Conti largely on the strength of her campaigning on the Car Tax issue), the legislature has failed to overturn the clearly unconstitutional tax (or address other unconstitutional aspects of the legislation, including establishment of unaccountable “government-owned enterprises” to administer the tax – er, “fee” – collections and revenues).
It has long been clear that the proper venue for overturning this highly unpopular, regressive, and unconstitutional tax increase is NOT via the legislature (which is unwilling or unable to act) but via a court challenge. Unfortunately, as long as the actively anti-TABOR “Mullarkey Majority” (and its successors) ruled the Colorado Supreme Court, prospects for a reasonable hearing on the merits (and interpretation actually based on the Colorado Constitution, as written) have been bleak.
However, due to recent changes in the composition of the state’s highest court (blatantly partisan and anti-TABOR Chief Justice Mary Mullarkey quit rather than face voters in 2010 and Mullarkey ally Justice Alex Martinez quit the court to take a Denver city job last Fall), along with the impending retirement of Mullarkey’s heir as Chief Justice (Michael Bender), a lawsuit challenging the ‘FASTER’ Colorado Car Tax (er, “vehicle registration fee”) increase might now have a chance.
Apparently judging the time to be ripe, the TABOR Foundation – represented by the Mountain States Legal Foundation – filed suit today (21 May 2012) challenging the constitutionality of the 2009 ‘FASTER’ Colorado Car Tax. From the organization’s press release:
“In clear violation of TABOR, the General Assembly enacted and CDOT implemented a scheme to levy taxes and raise revenues without a vote of the people of Colorado,” William Perry Pendley of the Mountain States Legal Foundation, said in a statement.
The lawsuit targets not only the over $100 Million in (unconstitutionally-imposed) new taxes levied, but also the $300 million in new government bonds imposed by the Colorado Bridge Enterprise (one of the constitutionally dubious quasi-government “enterprises” established under the ‘FASTER’ law).
The Foundation seeks declaratory and injunctive relief and an order requiring refund of all revenues collected, along with the payment of interest, as required by TABOR.
The TABOR Foundation’s lawsuit highlights the fact that legislative action alone is frequently inadequate in preserving rights and freedoms – bad laws can (and should) be struck down by citizens (working alone or in groups) defending their rights in court. The fact that it took years before the conditions were conducive to a court challenge also highlights the fact that elections to legislative or executive office are not the only votes that matter – underlining the critical importance of the judicial accountability movement spearheaded beginning in 2009 by Clear The Bench Colorado.
Clear The Bench Colorado will, with your support, continue to promote transparency and accountability in the Colorado judiciary, informing the public to increase awareness of the substantial public policy implications of an unrestrained activism and political agendas in the courts. We will continue to work to educate voters and provide information of relevance related to the judicial branch, and to provide useful and substantive evaluations of judicial performance.
However, we can’t do it alone – we need your continued support; via your comments (Sound Off!) and, yes, your contributions. Freedom isn’t free -nor is it always easy to be a Citizen, not a subject.
Ultimately, though – it’s worth the effort.