Democrat Tax Increase Faces Heat from Growing Coalition

Face the State Staff Report

DENVER - A groundswell of opposition is building against Gov. Ritter's recent mill-levy tax increases, including the Colorado Attorney General, state legislators, and a leading think tank.

Democrat Gov. Bill Ritter signed into law a tax increase as part of the school finance bill on May 9. Narrow Democrat majorities in the house and senate pushed the change in the closing days of the legislative session this May, over strong legal objections. According to non-partisan legislative analysts, the policy change will raise an estimated $1.7 billion in new property tax revenue over the next decade. Businesses and homeowners will face different increases based on the school district in which they reside.

The new law shifts some of the burden for school funding to the local level so lawmakers can increase spending on their priorities in the state budget. Though the governor and his allies have promoted the property tax increase under the heading of the “Colorado Children’s Amendment,” there is no guarantee of any additional overall spending on public schools.

Under the state constitution's Taxpayer Bill of Rights, every tax increase must be approved by approved prior to implementation. Yet state officials have staked their case for raising taxes without voter permission on prior local elections in which voters have enabled school districts to keep additional revenues. Proponents say these elections count as sufficient public approval for their statewide tax proposal.

But Deputy Attorney General Jason Dunn said that the Colorado constitution doesn't allow the state to lean on past local elections as evidence of support."The bottom line is that TABOR says if the state wants to change its tax policy to generate more revenue, the state must get voters' permission," he said.

In order for opponents to begin to make their case, the ballot questions from the local school district elections would have to include language stating that the district can keep revenues, "even if the state later changes tax policy."

"Did voters really contemplate the state subsequently changing its tax policy? I highly doubt it," said Dunn.

The ongoing research of the Independence Institute, a free market think tank, appears to uphold Dunn's assertion. Researching the 175 school district elections in question, the Institute has uncovered numerous cases where local school board members promoted the ballot elections as "not a tax increase." Organizing legal action on behalf of aggrieved taxpayers, the Institute agrees Ritter's proposal should go to a statewide vote.

Another critic of the Democrat-led approach says that changing the state law based on the various local election outcomes would thwart the will of many voters. A former Republican state senate leader believes the governor’s resistance to asking voters is based in fears that statewide voters wouldn't approve the latest Democrat-pushed property tax increase.

“The refusal to let the voters have a say in their property taxes really indicates the Ritter administration knows that this is first of all unpopular, and that it’s at least perceived to be unconstitutional,” said Mark Hillman, who also served as interim state treasurer in 2006.

Evidence has accumulated that there may be fear of voter reprisal. Advocacy groups have published and distributed brochures defending legislators who supported the property tax increase. The literature attempts to deny the fact that the new law will raise taxes.

Hillman believes that if the property tax proposal were the right approach, the governor and his allies could only stand to gain politically by putting the question before the people who elected him last year.

“If it was good policy, they’d take their case to the voters and then laugh all the way into the next session,” he said. “They’d have the confidence and the support of the electorate on their side.”

The resistance to asking for voter approval may stem from recent history. Hillman sees the reluctance to ask voters to raise their property taxes as a sign of fear that an election also might expose the myth of alleged broad support for a 2005 statewide tax increase that passed with only 51 percent of the vote.

“If they really believe that Referendum C was so wildly popular, then something like this should not be difficult,” he said.

Hillman added that pending tax hike proposals for budget areas like transportation and health care may make asking Coloradans to approve a mill levy increase for schools one too many for those who want to win them all. “It will be very interesting to see just how deep a threshold voters have for the other tax increases being proposed,” he said. “Those are the ones making it exceedingly difficult to put this one on the ballot, because voters can only take so much.”