Lawsuit over tax freeze possible

DENVER - A conservative think tank sent open-records requests Thursday to 175 Colorado school districts as a prelude to filing a lawsuit to overturn a property tax freeze signed by Gov. Bill Ritter this year.

The freeze is a provision in the 2007 School Finance Act that stops a decadelong reduction of property tax rates in 142 districts in which revenue increased faster than the rate of student growth and inflation.

It lowers property tax rates in 33 districts and does not affect three others.

The $1.7 billion expected to be generated during the next decade will stay with the districts, offsetting money that the state has used to supplement local funding. The strategy allows the state to use that money to shore up the State Education Fund and other areas of the budget.

Ritter contends he is following the will of voters in 175 of the 178 districts, who have voted to keep annual revenues above a government-mandated cap.

Those communities voted to freeze tax rates, but a provision in the 1994 School Finance Act kept them from doing so, he has said.

Jon Caldara, president of the Golden-based Independence Institute, contends the freeze is a tax hike because property owners will pay higher taxes when their property values increase. Caldara cites an April opinion from Attorney General John Suthers that because Ritter’s plan substantially changes tax policy, it should have required a vote of the people.

“When I was raised, my momma always told me that gentlemen ask first,” Caldara said at a morning news conference. “Unfortunately, this state government doesn’t want to ask first.”

Caldara said he is looking for the ballot language of each of the school districts’ socalled “de-Brucing” measures, the resolutions that were passed to put them onto the ballot and any internal communication between officials over whether they sought to freeze tax rates permanently.

There will “definitely be a lawsuit” when the informationgathering is done, he said.

Ritter spokesman Evan Dreyer assailed Caldara’s efforts as a “tasteless stunt” and said the governor will vigorously defend against any lawsuit. Suthers has agreed not to defend the state in this case, and Ritter is in the process of hiring outside counsel, Dreyer said.

Rep. Jack Pommer, a Boulder Democrat and sponsor of the School Finance Act, noted that most local ballot issues do not put a time limit on the collection of excess revenues and that some even reference a reversal of the 1994 School Finance Act. He and the bill’s Senate sponsor, Democrat Sue Windels of Arvada, said Caldara won’t find what he’s looking for in all the paperwork.

“I don’t think he’ll find anything that says: ‘Voters, if you de-Bruce, we’ll start ratcheting down your mill levies,’ ” Windels said. “I think he’s totally barking up the wrong tree and won’t find anything that supports his assertion.”

Colorado Republican Party Chairman Dick Wadhams vowed to make the mill levy freeze a talking point in the upcoming campaign. The bill even led to the creation of a YouTube spoof music video criticizing Ritter and Joint Budget Committee Vice Chairman Bernie Buescher.

Ritter signed the bill shortly after the session ended, and property assessments that come out next year will feature the frozen mill levies.

The 2007 School Finance Act also increased the budgets of the 11 school districts that had received the least funding from the state, including Cañon City, Widefield, Falcon and Cheyenne Mountain. Caldara said he does not expect to challenge that provision in the lawsuit.

CONTACT THE WRITER: (303)837-0613 or ed.sealover@gazette.com