Bill Ritter’s Tax Hike on Trial: Day 1

Yesterday was the first day of the court hearing on the lawsuit by the Independence Institute (where I work) and Colorado taxpayers against Gov. Bill Ritter’s unconstitutional property tax increase.

Today’s Denver Post explains a key issue behind the plaintiffs’ argument:

They noted that in 1993, the General Assembly amended the School Finance Act to ensure that the property taxes raised for the local share of total program funding for public-school education in each school not violate the revenue cap of the Taxpayer’s Bill of Rights.

But with passage of the 2007 amendment, Ritter used it to freeze mill-levies, the opponents charged. The freeze holds mill levies — the rate at which taxes are charged — in place when they normally would fall, allowing local school districts to collect more tax money. The state, in return, can use the money it saves for other purposes.

“These are property taxes,” said lawyer Richard Westfall in his opening statement Monday in the weeklong trial. “Evidence will show the purpose of the amendment was to shift the tax burden from state to local citizens.”

Over in his account of the first day’s proceedings, Jon Caldara has a great analogy for this transfer:

…[L]et’s say your employer starts paying your personal home mortgage for you so you don’t have to, did he just give you a pay raise? The state lawyers in court today would argue no, because your boss didn’t give you a larger paycheck. The rest of us would recognize it as a raise because one of your big expenses is now being paid by someone else, giving you more cash to spend on other things. The mill levy freeze is helping pay the state’s bill to local school districts – money the state now doesn’t need to pay them.

And our state constitution is very clear. If the state gets more money to spend, it has to the voters for permission first. Our constitution simply says Ask First!

The Post also picks up the solitary argument from the other side’s team of lawyers:

But lawyers for Ritter and the Colorado Department of Education told Habas that TABOR’s revenue and spending limitations are not absolute and that the mill-levy freeze is proper. The TABOR limitations can be changed, weakened or done away with entirely, if voters approve, argued lawyers John Mill and Mark Grueskin. And that is exactly what happened, they told Habas.

The fundamental flaw in the taxpayer-funded government attorneys’ argument is that the de-Brucing elections voters faced in many school districts were not advertised as authorizing tax increases. Caldara highlights an example in the testimony from an elected school board official in El Paso County’s Cheyenne Mountain School District:

He is on a small school board and helped campaign for his school district’s successful de-brucing. He held himself out to his small community and promised that if they voted to pass the de-brucing it would allow the district to keep an extra $120,000 or so in extra revenue. He promised his community it WOULDN’T RAISE TAXES. Bill Ritter’s mill levy freeze has made him into a liar.

Bill Ritter’s mill levy “freeze” made this school board member into a liar, and many other Colorado voters into fools. Stay tuned here and at Jon Caldara’s blog for updates on Day 2 of Bill Ritter’s tax hike on trial.