School tax gets nod, for now

High court lifts injunction, holds off on legal ruling

By Berny Morson, Rocky Mountain News (Contact), Ed Sealover, Rocky Mountain News

Published December 6, 2008 at 12:05 a.m.

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A law that funnels more tax money to schools is still in force for now, allowing local school districts to raise taxes in 2009, the state Supreme Court said Friday.

But the court refused to say whether the law is constitutional, and it gave no hint when that decision will come.

The 2007 law would raise about $1.7 billion for schools over 11 years by blocking a scheduled dip in property taxes.

This year, the state realized an estimated $118 million in additional revenue because of the law.

Opponents filed suit, saying it's an unconstitutional tax increase because it wasn't approved by voters under Colorado's Taxpayer's Bill of Rights.

In a two-page order, the judges lifted an injunction by Denver District Judge Christina Habas, who held the law unconstitutional. The unsigned Supreme Court order allows the 178 school districts to set tax rates, which are due at the state Education Department by Dec. 15.

The Education Department this week asked the court to rule in the case by Friday so the school districts could meet the deadline. The court heard oral arguments in September.

The law is backed by Gov. Bill Ritter and most Democrats in the legislature. Most Republican lawmakers oppose it.

Both sides warned against viewing the order as hinting at which way the court will rule.

Evan Dreyer, Ritter's spokesman, said, "This is a very specific, very narrow order."

"We're not reading the tea leaves at all," said Education Department spokesman Mark Stevens.

Richard Westfall, the attorney for groups and individuals who brought the suit, said that if the judges had wanted to rule on the constitutional issue, they would have done so.

"It seems to me they have not yet decided it," Westfall said.

The order itself says the court, in lifting the lower court injunction, intended to "preserve the status quo as it existed under (the 2007 law) until this court issues its final decision in this matter."

But several lawmakers read the order as upholding the law.

Rep. Jack Pommer, D-Boulder, said the court wouldn't tell schools to set tax rates one way, then tell them to do something different in a few weeks.

"It just seems like an odd thing to do," he said. Pommer was the main House sponsor of the 2007 law.

Pommer said the order makes it likely lawmakers will have more money to work with next year. But, "it's not like it's a total relief. It could be a cruel joke."

Sen. Josh Penry, R-Fruita, said the order demonstrates the court's partisan bias.

"I've always assumed that this court would place its loyalty to the Democratic governor ahead of its fidelity to the constitution. This Supreme Court is the most partisan branch of government in Colorado."

The Associated Press contributed to this report.

What's at stake

An injunction blocking a law dealing with school taxes that some say is unconstitutional has been lifted by the state Supreme Court. Here are the issues:

* At issue: A 2007 school finance law that freezes property tax rates in most of the state's school districts. The frozen rate means higher tax bills for owners of property that has risen in value.

* Opponents: Argue that the law is unconstitutional because it was not approved by voters.

* Supporters: Argue that voters in school districts had already given approval in referendums between 1995 and 2006. Those votes allowed school districts to retain revenues in excess of spending caps, but did not mention a tax increase.

* What happened Friday: The state Supreme Court didn't say if the law is constitutional, but it did lift an injunction by a district judge who earlier held the law unconstitutional.

* What happens next: The Supreme Court gave no hint when it will rule on the constitutionality question. School districts, in the meantime, will send out tax notices based on the 2007 law.

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