If you’ve filled up your gas tank lately, you know how much gas prices have skyrocketed over the last year. With the average price per gallon in Colorado at almost $4.80, and with inflation costing the average family $5,200 more per year, families across the state are struggling to make ends meet.
Fortunately, Colorado has the Taxpayer’s Bill of Rights (TABOR), which is supposed to ensure that elected officials can’t drive up the cost of living even more by raising taxes without voter approval. Unsurprisingly, TABOR is popular with Colorado voters, but not so popular with many elected officials.
For years, the legislature has been trying to chip away or go around TABOR. They realized that if they call something a “fee” instead of a “tax” (and put the money into a separate account called an enterprise), they can evade TABOR and raise revenue without ever having to ask voters.
So last year, that’s exactly what the legislature and Governor Polis did when they passed Senate Bill 260. This massive $5.4 billion transportation-related bill created new “fees” on gasoline, deliveries, ride sharing and more. At the time, the sponsors of the bill were concerned that voters would never support such a big “fee” increase. But they also thought they knew better and wanted to do it anyway. Instead of using existing funds — or putting in the work to convince voters that this was the right plan — they rammed it through and thought nobody would notice their messy work.
In 2020 (prior to the passage of SB-260), Colorado voters approved Proposition 117 to address and potentially limit this massive growth of state fees. Prop 117 said that any new fee over $100 million in the first 5 years needed voter approval. When we wrote Prop 117, we knew that the legislature would try to play games to get around it. So, we included a provision saying that if a group of fees “serve substantially the same purpose,” they would all count toward the $100 million.
Fast forward to the next legislative session and that’s exactly what happened in SB-260. The bill created four new “fee-based enterprises”— all individually staying under the $100 million limit in their first 5 years, but collectively going far over it. This scheme is a clear violation of Prop 117, and we are suing over it.
The second main legal challenge we are making is equally persuasive. TABOR allows state revenue to increase by inflation plus population growth. Money beyond this “TABOR cap” is required to be refunded to taxpayers. In SB-260, however, legislators and the Governor decided to raise that cap and take $225 million per year of our TABOR tax refunds without asking voters. This is unconstitutional.
Seeing the political reality of raising the gas “fee” while gas prices are so high, the governor asked the legislature to temporarily delay the increase. But instead of just permanently repealing this entire bill, he is just asking for a short timeout until after the November election.
To put the overall arguments in this lawsuit simply: Governor Polis and the State of Colorado don’t want voters to have their say. On the other hand, we will be arguing that TABOR and Prop 117 clearly state that SB-260 should go to the ballot for approval.
We are happy to join Americans for Prosperity, Senator Jerry Sonnenberg and Richard Orman in this important lawsuit to give Coloradans the vote they are entitled to.
Michael Fields is the President of Advance Colorado Institute.
