Colorado Brief: TABOR’s Plain Language Should Control Water District Tax Increases

The Taxpayer Defense Center filed an Opening Brief in the Colorado Court of Appeals on a vital issue to Colorado taxpayers. 

James Aranci and his neighbors in Colorado were in for a shock in 2020. Beyond the pandemic and other newsworthy events, their property taxes to the local water district doubled from 2019 to 2020. But James lives in Colorado, which has the Taxpayer Bill of Rights (“TABOR”) that is supposed to stop this very situation from happening. TABOR mandates a ratification vote of any proposed tax increase or new debt taken on by government entities–including water districts.

No one voted to approve the doubling of the taxes in the Lower South Platte Water Conservancy District (located in Northeastern Colorado). So James and his neighbors challenged the tax increase as violating TABOR, seeking the rate be reset and a refund of what was illegally collected. 

But the District Court found no TABOR violation, concluding that the underlying property tax statute allowed for a range of rates when the water district has “varying budgetary needs.”  That exception will swallow the whole of TABOR. 

The Colorado courts have been hostile to TABOR, finding exceptions that keep the government from having to ask the voters for approval. Two exceptions are relevant here: a “ministerial” exception and a pre-TABOR-voter-approval exception. Neither applies here. 

In its brief, TDC argued that setting a budget—including making the hard decisions on whether to raise rates, take on debt in the form of bonds, or tighten its belt—is a legislative function of the water district. This is not mere ministerial acts, like setting a tax rate based on an inflation adjustment. Nor is it merely correcting an error. 

This is instead a substantive change to the tax rates, meaning the voters get to decide if the government needs the money. Without voter ratification, the Water District’s mill levy rate doubling is unconstitutional. Neither the District Court nor the Water District could point to such an approval—prior to TABOR or after the constitutional amendment’s effective date. 

We will keep you posted as this case develops.