TABOR, the Taxpayers Bill of Rights, is an amendment to the Colorado state constitution passed in 1992 which imposed two main restrictions on state and local governments across the state. First, it restricted the rate at which government spending could increase year-over-year to the sum of population growth plus inflation, unless increases beyond that were approved by a vote of the people in the jurisdiction. Excess revenue beyond what could be spent had to be refunded. Second, it required that new taxes, or increases to existing tax rates, must also be approved by a vote of the people. The effect was to impose direct-democracy restrictions on the ability of elected government officials to set tax rates and spending levels.
Whether by design or coincidence, the most serious consequences of the TABOR restrictions come into play during recessions. Following the recession of 2001, the Colorado state budget was in sufficiently dire straits that the legislature put Referendum C on the ballot in 2005. Ref C provided a five-year time-out on TABOR refunds, and set a new floor from which future spending increases would be measured. Ref C was supported by then-governor Bill Owens; many people believe that support cost Mr. Owens a bright future on the Republican national stage. The recession of 2007-09 also put large pressures on the state budget. In response to the pressures brought on by recessions, the Colorado legislature has resorted to a certain amount of accounting trickery: the Colorado Opportunity Fund shields a considerable part of state higher education funding from TABOR, as did a rewrite of the unemployment insurance statutes to replace the word "tax" with "premium" wherever it appeared.
In 2011, a group of current and former members of the state General Assembly filed suit in federal court challenging TABOR on the grounds that by removing control of taxes and spending levels from the legislature, Coloradans were denied the "Republican Form of Government" guaranteed by the US Constitution. To this point, the argument has been whether the plaintiffs have standing to sue, and whether the entire matter is non-justiciable due to the political question doctrine. In 2012, the District Court ruled that (a) plaintiffs had standing and (b) this case is sufficiently different from others settled in the past that the political-question doctrine did not apply. Last Friday, the Appeals Court agreed, and remanded the case to the District Court for further proceedings.
Opinions. Bear in mind that IANAL (although I had to pretend to be one at time while I was working for the state legislature), nor without bias in this matter:
- To this point, the defense has been remarkably lazy. Their argument consists basically of "state legislators don't get standing just because they lose a vote" and "the SCOTUS says Guarantee Clause matters are non-justiciable." In fact, the SCOTUS decisions are much more nuanced than that. Where the defense has ignored the details entirely, plaintiffs appear to have done their homework on those nuances, building arguments that all of the SCOTUS conditions for standing and justiciability are satisfied. Thus far, the District and Appeals Courts have concurred.
- In light of this, I expect the defendants to appeal to the SCOTUS. I say that because I expect that the defense has been just as lazy in preparing arguments in the event that the case goes forward. Better odds for success at this point for getting a conservative SCOTUS -- and politically, TABOR is a darling of small-government conservatives -- to say the Appeals Court misinterpreted things and toss the whole case.
- Should the case go forward, the defense argument will largely be "the legislature gets to split the pie up however they want, subject to other restrictions that aren't being challenged in this suit -- they just don't get to set the size of the pie." And that such a restriction doesn't impose an undue burden, since they can always ask the voters to make the pie bigger (although in Colorado, making such a request requires a two-thirds super-majority in each chamber).
- Should the case go forward, and the defendants make that argument, they will lose -- setting the size of the pie will be defined to be a core legislative function. And lose again on appeal. And then win in the SCOTUS, assuming the current make-up.