DENVER - In a major victory for Gov. Bill Ritter, the state Supreme Court upheld a 2007 bill he signed that resulted in higher property taxes for many homeowners.
"The real winners today are Colorado's children, Colorado's families and Colorado's schools," Ritter said.
The court ruled 6-1 in favor of 2007's School Finance Act, which froze property-tax rates in most of the state's 178 school districts. The plaintiffs said the act violated the Taxpayer's Bill of Rights because it brought more money into the state budget without asking the voters for approval.
Before the 2007 act, tax rates dropped every time property values increased because of a 1994 state law. After 2007, property taxes rose for many homeowners because the tax rate was frozen while property values went up. Now that property values are decreasing, homeowners can expect lower property tax payments, Ritter said.
Republicans accused the high court of "judicial activism."
"They're the most partisan branch of state government. They routinely do what's good for Democrats," said Senate Majority Leader Josh Penry, R-Grand Junction.
Five justices, all appointed by Democrats, affirmed the School Finance Act. Justice Nathan Coats, appointed by Republican Gov. Bill Owens, agreed with the outcome but for different reasons. Another Owens appointee, Justice Allison Eid, was the lone dissenting vote.
Attorney General John Suthers, a Republican, blasted the decision.
"The Supreme Court's decision today represents a fundamental erosion of Colorado taxpayers' rights," Suthers said in a news release.
Until the 2007 act, the state had been paying more and more of the school districts' bills each year, even though voters in most districts had decided to exempt their districts from TABOR.
The 2007 law brought $123 million into state coffers in its first year and $135 million this budget year, said Ritter's spokes-man Evan Dreyer.
"Everyone in Colorado wins today, especially Colorado's children," Senate President Peter Groff said in a news release.
The Legislature, however, isn't required to spend the windfall on schools. In fact, last year it used some of the money to expand children's health insurance. (It cut that funding this year to cope with the recession.)The case hinged on whether the Legislature could say votes in local school districts to exempt the districts from TABOR counted as voter approval to change the school-finance formula. Chief Justice Mary Mullarkey, who wrote the majority opinion, sided firmly with Democrats.
"(The 2007 School Finance Act) does not establish a new tax or increase tax rates. Rather, it allows the public school funding system to capture increased property tax revenues resulting from increased property values," Mullarkey wrote.
But the court's lone dissenter said the School Finance Act should have been put to the voters.
"There has never been (and under the majority's opinion today, never will be) a vote of the people authorizing this change in state tax policy," Eid wrote.