Taxpayer’s Bill Of Rights Raises Questions

Twenty one years ago, Colorado voters approved a state constitutional amendment creating a Taxpayer’s Bill of Rights that limits the annual growth in state and local revenues to the total of the inflation rate and the percentage change in the state’s population.

For example, if inflation is 3 percent and the state’s population increases by 1 percent, state spending can go up by 4 percent. A budget proposing further increases in spending must be approved by a public referendum vote. Taxpayers are also entitled to a refund if tax collections increase faster than the rate of inflation or population growth.

Critics, including dozens of current and former Colorado legislators, say the inability to spend taxpayers’ money has hurt the services Colorado can provide. They say education has suffered, making it difficult to train qualified workers. Lawmakers also say the spending restrictions have hurt infrastructure repair, such as road construction, and forced the state to eliminate hundreds of programs statewide. A second constitutional amendment approved by voters limits amendments to one topic. Since the Taxpayer’s Bill of Rights deals with several dozen areas, it would take several amendments to reverse it.

Rather than fight the legislative battle, lawmakers have turned to the courts. They have filed a lawsuit, Kerr v. Hickenlooper, arguing the Taxpayer’s Bill of Rights violates the Guarantee Clause of the U.S. Constitution in Article 4, Section 4, which requires the federal government to “guarantee to every state in this union a republican form of government.” Lawmakers argue Colorado must have the power to tax and spend, without restriction, or else it isn’t a republic.

The case is awaiting argument in the 10th Circuit Court of Appeals in Denver. A ruling in favor of the Colorado lawmakers would be a departure from a long-held precedent set in the 1912 Supreme Court case Pacific States Telephone and Telegraph Co. v. Oregon, in which the court refused to rule whether state legislation by initiative and referendum was inconsistent with republicanism.

The Supreme Court set a solid precedent 101 years ago that should be followed today by the federal court in Denver. While Colorado is the only state with such a restrictive stance Taxpayer’s Bill of Rights, 49 states have measures such as New York’s 2 percent tax cap either debt, taxes, and spending. The fact that such laws exist is a statement from the governed that they need protection from the taxing power of the government. Removing such protection from taxpayers should be legislated, not removed by the courts.