AG calls schools plan a tax

Governor, Dems argue that voter OK isn't required

Berny Morson And Alan Gathright, Rocky Mountain News

Published April 28, 2007 at midnight

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Gov. Bill Ritter's plan to raise millions for schools came under fire Friday by the state attorney general, who called the proposal a tax hike that needs voters' OK.

"My best judgment is that this proposal requires voter approval under the Constitution," Solicitor General Dan Domenico said in a letter advising Attorney General John Suthers.

Domenico said the plan "will have the direct effect of raising the property tax burden of many taxpayers in the state," and Suthers said he concurred.

Ritter and other Democrats immediately denounced the AG's opinion.

Ritter cited his own attorney's opinion, and two opinions by attorneys for the legislature.

"They all have come to the exact opposite conclusion that the attorney general has reached," Ritter said.

Ritter proposes to cancel tax reductions that would otherwise occur under the 1994 school finance law. The plan would raise about $55 million a year.

At issue in the clashing legal opinions is whether the proposal violates a portion of the Colorado Constitution - called the Taxpayer's Bill of Rights, or -TABOR - that requires voter approval for tax increases.

Ritter and other Democrats argue it is not a tax increase. They say the proposal only freezes the rate in each school district at which property is taxed.

Republicans contend it is a tax increase because homeowners and business owners will pay more as their property values rise.

Suthers, also a Republican, now sides with that view.

In a letter to Ritter, Suthers cites a portion of the constitution that includes as a tax increase any "tax policy change directly causing a net tax revenue gain to any district."

Democrats - including Ritter and legislative leaders - counter that voters in 175 of the state's 178 school districts approved referendums exempting themselves from TABOR.

Domenico's opinion states the 175 local district votes don't satisfy the need for a vote on Ritter's plan. A statewide vote is needed to change a state tax policy, he states.

Suthers' opinion doesn't bar the legislature from passing the plan, which was added to the annual school finance bill.

The House approved that bill Friday morning and sent it back to the Senate, where it could falter.

Three Senate Democrats harbor deep concerns about the plan, fearful of a potential voter backlash.

Sen. Ron Tupa, D-Boulder, said he likely would vote against the plan because he believes it will not withstand a constitutional challenge. He said it can be construed as a tax increase and should go to voters.

Senate Minority Leader Andrew McElhany, R-Colorado Springs, said Suthers' opinion demonstrates what Republicans have said all along, that the plan must have voter approval.

If lawmakers pass the plan, it could still wind up in court.

El Paso County Commissioner Douglas Bruce, author of the TABOR amendment, already has promised a lawsuit if Ritter's plan takes effect.

Clashing opinions

• What the legislature's legal counsel said:

The governor's proposal "does not constitute a tax policy change that directly causes a net tax revenue gain to any district and does not require prior voter approval . . ."

• What the state attorney general's office said:

". . . the best reading of the Colorado Constitution requires that a revision of this sort, which will have the direct effect of raising the property tax burden of many taxpayers in the state, be submitted to the voters for approval."

• What's next: The bill that includes the governor's plan goes to the Senate, where a close vote is expected. If it passes, opponents have vowed a court challenge on grounds that it should have gone to the voters.

morsonb@RockyMountainNews.com or 303 954-5209 April Washington contributed to this report.

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