Doug Bruce Loses TABOR Appeal

Douglas Bruce, an anti-tax activists and member of the El Paso County Commission (the county in which the City of Colorado Springs, Colorado is located), sued the City of Colorado Springs alleging that a 2000 cable TV franchise ballot measure passed in the city and a 2002 street light user's fee adopted by the city violated Colorado's Taxpayer's Bill of Rights (TABOR), which he drafted. He lost in the trial court. Today, his appeal in the Colorado Court of Appeals failed as well in a 2-1 decision.

Bruce tried to equate cable TV franchises and street light user's fees with taxes. The Colorado Court of Appeals, acting under tests previously set out by the Colorado Supreme Court for making the distinction between taxes and other kinds of revenue, disagreed, finding that they were not taxes, just as the trial court had in this case, while at the same time acknowledging that the governing precedent could be used to restructure almost any tax as a user's fee.

A dissent by Judge Graham argued that fees can only be charged for services not usually provided by the government (a weak argument in my opinion, given the many ordinary governent services, like deed recording, licensing, conducting evictions, docketing court cases for which user's fees are routinely charged), and only if the services provide a direct benefit to the person to whom they are charged (a stronger argument, but harder to apply in practice than it seems).

I have little doubt that Bruce will continue his fight in an appeal to the Colorado Supreme Court (recourse to the federal courts should be unavailable as this question uniquely arises under the state constitution). Whether the Colorado Supreme Court will choose to weigh in is an open question, although the high profile of the Plaintiff, general relevance of the case to every municipality in the state, implicit criticism of its prior ruling in the Court of Appeals despite the fact that the ruling is followed, and divided panel all suggest that the Colorado Supreme Court might agree to consider the case. If it does, the street light fee, which looks a great deal like a special assessment property tax (which is a tax for TABOR purposes) is likely to be vulnerable, although the case with regard to the cable TV franchise, which Colorado Springs has argued is a permissible activity of the city under its home rule powers, is probably more likely to survive scrutiny since only cable TV subscribers pay the alleged "indirect tax" in the form of the franchise fee paid by the company to the city, providing a direct benefit to the citizens who pay it, and because cable TV services are not a traditional function of local government.

As a footnote, Douglas Bruce represented himself without an attorney in the case. He might consider hiring one for a Supreme Court fight if he really wants to win.