Douglas Bruce files suit against El Paso County over TABOR

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Elephants have good memories, they say. And one "elephant," Republican Douglas Bruce, is living up to that maxim.
Douglas Bruce is  targeting El Paso County. - FILE PHOTO
  • File photo
  • Douglas Bruce is targeting El Paso County.

His good memory could mean a tax refund for voters if a lawsuit he recently filed against El Paso County is successful.

Let's back up for a moment. In 2012, El Paso County voters approved a sales tax increase, known as 1A, of .23 percent to fund the Sheriff's Office. Problem is, Bruce contends, the ballot measure stated the amount that would be raised would be "approximately $17 million" annually, and the tax has generated more than that every year since. (County officials disagree that they're in violation. More on that later.)

But let's just focus on 2013, the first year the tax was collected. In that year, the tax raised $17,898,721, according to the county's 2017 budget document.

Bruce says that roughly $900,000 should have been refunded to voters and the tax rate adjusted so the tax wouldn't raise more than authorized by the ballot measure. That's the procedure outlined by a state constitutional amendment that Bruce authored, the Taxpayer's Bill of Rights, which was adopted by voters in 1992.

Here's the provision of TABOR that Bruce says applies in this instance:

Except by later voter approval, if a tax increase or fiscal year spending exceeds any estimate in (b)(iii) for the same fiscal year, the tax increase is thereafter reduced up to 100% in proportion to the combined dollar excess, and the combined excess revenue refunded in the next fiscal year.

The (b)(iii) reference regards a TABOR provision as to what's required in the election notice:

For the first full fiscal year of each proposed district tax increase, district estimates of the maximum dollar amount of each increase and of district fiscal year spending without the increase." (Emphasis added.)
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Says Bruce, "They are only supposed to get whatever they asked for." The county's dollar amount cited, again, was "approximately $17 million."

Bruce has filed a lawsuit, contending the county knowingly violated this TABOR provision by failing to refund the money and adjust the tax rate after it was clear the amount collected exceeded the amount contained in the ballot language. He wants the tax rate adjusted and extra money returned, including 10 percent interest.

To be clear, the ballot language could have overshot the amount, but Bruce says it can't, by law, underestimate the total to be collected and keep the money.

From Bruce's lawsuit, filed in recent days:
The purpose of TABOR (3)(c) is to prevent government from “lowballing” the true cost of what it requests in order to lure voters to support it. Note that the 2012 ballot title also did not tell voters the truth, though TABOR (3)(c) requires it to list a “...full fiscal year dollar increase) ANNUALLY.” Sad to say, that was also false.
Bruce further argues in his lawsuit that the state legislature recognized this provision of TABOR to be applicable to a similar situation involving marijuana taxes and then corrected it. From the lawsuit:
The state legislature is also required to enforce the constitution. It did so recently by referring issue BB to the ballot issue. Issue AA had understated the fiscal year spending in its marijuana tax increase ballot language, also a violation of TABOR (3)(c). Findings by the legislature are given great weight in enforcing the constitution. The legislature found the falsely-low figure given to voters triggered liability under TABOR (3)(c). The legislature then sought “later voter approval” of the corrected figure at the next election.
The sum of 1A tax collections collected in excess of $17,000,000 per year since the tax started is $15,873,572, if one includes an estimated 2017 tax collection of $22 million.

"By lying to the voters, they wanted to reward themselves with illegal money since 2013 and disregard the penalty, disregard the interest, disregard the rate reduction, disregard having lied about the $900,000 after they knew about it, because they are deeply dishonest thieves," Bruce tells the Independent.

"It's all compounded with 10 percent interest, because they intentionally violated the law once they knew they had lowballed the voters and they didn't try to correct it," he says. "They just hoped that nobody would pay attention."

Bruce points to the 1A ballot language as contained in the TABOR notice as proof of his assertions:

SHALL EL PASO COUNTY TAXES BE INCREASED BY APPROXIMATELY $17 MILLION ANNUALLY TO DIRECTLY FUND THE URGENT PUBLIC SAFETY NEEDS IDENTIFIED BY EL PASO COUNTY SHERIFF TERRY MAKETA, THE CHIEF LAW ENFORCEMENT OFFICIAL SERVING ALL RESIDENTS OF THE CITIES, TOWNS AND UNINCORPORATED AREAS WITHIN THE BOUNDARIES OF EL PASO COUNTY, AS CRITICAL TO PERFORMING HIS STATUTORY OBLIGATIONS TO ALL EL PASO COUNTY RESIDENTS, BY INCREASING THE COUNTY’S SALES AND USE TAX RATE BY TWENTY-THREE HUNDREDTHS OF ONE CENT ($0.0023) PER DOLLAR PURSUANT TO PART 1 OF ARTICLE 2 OF TITLE 29, COLORADO REVISED STATUTES;
WHICH NEEDS ARE SPECIFICALLY IDENTIFIED IN THE AREAS OF LAW ENFORCEMENT, CRIMINAL JUSTICE AND EMERGENCY RESPONSE.... AND WITH AN EIGHT-YEAR SUNSET PROVISION, SUCH SALES AND USE TAX INCREASE TERMINATING WITHOUT THE NEED FOR FURTHER ACTION ON JANUARY 1, 2021?

But while Bruce says the county is in violation of TABOR, county officials disagree. When the Indy asked about the extra 2013 revenue, back in mid-2014, the county attorney's office responded with this statement on June 4, 2014:
In the last paragraph of the ballot question, the following language was used: "...with all revenues generated and the earnings on such revenue to be collected and spent each year without limitation by the revenue and spending limits of ...Article X, Section 20 of the Colorado Constitution...." The voters thus authorized the County to collect amounts above the estimated $17 million and to spend the same. 
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Bruce brushes that aside, saying TABOR requires a ballot measure to state a dollar amount to be collected and the government must adhere to that dollar amount.

Asked to comment on Bruce's lawsuit, county spokesperson Dave Rose provided this statement, via email:
The voters approved the 0.23 sales tax increase for public safety purposes. Budget estimates made in 2012 were based on the available data at that which reflected the ongoing impacts of the economic downtown [sic] commonly known as the Great Recession and were offered only as budget projections for the purposes giving voters a general idea of collections that might be expected if the current economic conditions continued.

If retail sales had continued weak the projections would have been very close, if they had worsened the projections would have been too high but what we had was a robust economic recovery with retail sales further bolstered by millions of dollars worth of roof replacements following the July 28, 2013 hail storm and then strong car sales bolstered by the replacement of Volkswagen diesels.

Voters are consistently more discerning than some people assume. They understood that they were approving a 0.23 percent sales tax for critical public safety needs and they understand that if retail sales go up there will be additional money available for that purpose and likewise that if sales fall short some of the promised improvements may be delayed.

Bruce says the county has 20 business days to file its response to his lawsuit after which a hearing will be held.

Read his lawsuit here:
See related PDF County_TABOR_complaint.pdf

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