Budget is the big battle in the Colorado General Assembly this year. The state faced a $1.2 billion deficit in February for the upcoming year, which has led to state politicians tossing out whatever ideas they can to cut costs. Deep, controversial cuts have already happened to K-12 education and agricultural aid.
With a proposed balanced budget that will head to Governor Polis in the next few days, some statehouse Democrats have moved their focus to ensuring that next year won’t have similar cuts. They want, essentially, to remove the budget growth caps put on the government by the Colorado Constitution through TABOR.
That will include the unusual step of having the state government sue itself in court, and with taxpayers funding both sides of the civil suit, the plan may lead to further short-term budget struggles.
The Trouble with TABOR
The key to understanding Colorado state funding is understanding TABOR, or the Colorado Taxpayer Bill of Rights. Essentially, TABOR limits the amount of money the state and local governments can spend and keep from taxes each year. Any money brought in from taxes that exceeds the budget cutoff is returned to the taxpayers in the form of stimulus checks.
That budget cutoff–the TABOR cap–changes every year based on three factors: the previous year’s population growth, the previous year’s rate of inflation, and any “voter-approved revenue changes” like last year’s Proposition 130.
The obvious issue with TABOR, according to State Representative Sean Camacho and the other Democrats proposing changes, is that important costs are outpacing the average rate of inflation. For example, medical care has gone up three times as fast as the average rate of inflation since 1985, which has increased the cost of state-provided healthcare via Medicare and Medicaid.
This leads to years like this one where Colorado collected more than enough taxpayer money to cover all their expenses, but since they are legally forced to send that money back to the taxpayers, a deficit happens anyway. This forces Colorado politicians to cut funding for programs because TABOR also requires that Colorado have a balanced budget every year.
How HJR 25-1023 Could Tame TABOR
Since TABOR is in the Colorado Constitution, state politicians that want to remove it can’t just get rid of it themselves–removing something from the Colorado Constitution takes 55% voter approval. And voters like TABOR–they were the ones to add it to the Colorado Constitution in 1992. They also rejected two previous ballot measures (2019’s Prop CC and 2021’s Prop HH) to change TABOR.
The only other way to change the Colorado Constitution is through the US Constitution. Due to the federal Supremacy Doctrine, state laws cannot conflict with national law. Thus, TABOR can be changed or removed if a court says its unconstitutional… which is the goal of the proposed lawsuit that would see the state sue itself.
The plan comes down to HJR 25-1023, which was introduced in the General Assembly on March 31. Essentially, the measure would allow the state legislature to “file a lawsuit on behalf of the general assembly in state district court to determine the constitutionality of the Taxpayer’s Bill of Rights.”
That lawsuit would require naming the State of Colorado as a defendant, meaning the defense would be handled by State Attorney General Phil Weiser and his office. Taxpayer dollars fund the state attorney general’s office, and unless a law firm volunteers to represent the legislature pro bono, the attorneys for the legislature would also be paid for with tax dollars.
Thus, if HJR 25-1023 passes, Colorado will be suing itself, and taxes might have to pay for both sides of the lawsuit.
What Happens Next?
Democrats control a majority of the General Assembly, so HJR 25-1023 will likely pass and move forward. Then, according to The Colorado Sun, the legislature will try to find a law firm that would “offer to represent the legislature for free given the high-profile nature of the case” before hiring a legal team.
After that? There’s not really a clear answer. Colorado has never sued itself before–in fact, very few states have ever had one branch fight another in court–so the scope of the trial is unclear. No other state has anything like TABOR either, so there’s no blueprint for how the measure will be attacked or defended in court.
The best predictor of how this lawsuit may go is a 2011 lawsuit against TABOR. Led by former state representative Andy Kerr, the suit also alleged that TABOR violated the US Constitution. In 2021, the US Court of Appeals and Supreme Court both refused to take the case and ended the lawsuit before it even went to trial–and the decade of legal work leading up to that was $500,000.
Alarmingly, $500,000 would likely only be a fraction of the cost. Past third-party legal bills in much smaller cases initiated by the legislature cost Colorado taxpayers tens of thousands of dollars. Furthermore, with the state funding both sides of the suit, it’s likely this lawsuit will cost the already faltering state budget millions. While it would cost much more to launch a campaign to get a measure removing TABOR on the ballot (around $2 million), that would be private donor money, not tax money.
However, there are signs that this lawsuit may succeed where the 2011 one failed. The prior lawsuit was filed by former state representatives and was dismissed because the group didn’t have standing–i.e., those against TABOR couldn’t prove that TABOR was causing specific harm to them. However, the HJR 20-1023 proposed lawsuit would be on behalf of active state legislators and argue that TABOR takes away their legislative power to increase taxes and spend revenue. A 2015 US Supreme Court case AZ Legislature v. AZ Independent Redistricting Commission established that, in a similar matter, the entire state legislature was the correct party to have standing in such a suit.
