A Denver district judge Wednesday rejected a legal challenge filed by anti-tax activist Douglas Bruce that argued the state was violating the Taxpayer’s Bill of Rights by designating buildings and other fixed assets — instead of cash — as a reserve.
Bruce, a Colorado Springs resident best known as the father of the TABOR amendment, had argued in a legal challenge that the state was violating the Colorado Constitution by designating parking garages and office buildings as part of the constitutionally required reserve.
TABOR, the measure voters passed in 1992 that limits government spending and requires voter approval for tax increases, says governments must reserve 3 percent of “fiscal year spending” for declared emergencies.
Under former Gov. Bill Owens, a Republican who governed during the first recession of the century, the state began to include fixed assets such as buildings and state-owned land to count toward the TABOR reserve.
In court papers, Bruce argued that “it is nonsensical to have a reserve for emergency spending that is comprised of dirt, buildings, tunnels and other illiquid assets. How can the state ‘spend’ a tunnel or raw land on disaster relief?”
The plain meaning of TABOR is to have cash on hand for emergencies and “not to list collateral that might eventually produce funds for emergency relief,” Bruce argued.
The state also has a budget reserve in its general fund, which is currently 4 percent.
Under the 2011-12 fiscal-year budget lawmakers approved during the legislative session, the state estimated it would maintain a $298.1 million TABOR reserve fund, of which $98.8 million is in state properties.
Those include a parking garage at East 13th Avenue and Lincoln Street and three nearby state office buildings.
The rest of the TABOR reserve is made up of cash funds for wildlife, tourism and workers’ compensation. Bruce argued that it was illegal to use these funds for disaster relief.
But Denver District Judge Ann Frick disagreed. In a written ruling, Frick said TABOR’s meaning isn’t clear.
TABOR “does not say ‘cash’ nor does it say what comprises this emergency reserve fund or what it is that the state shall ‘reserve,’ ” Frick wrote. “Therefore the court finds the provision ambiguous.”
In the absence of clarity, the judge said, the issue falls to the legislature to interpret. And lawmakers for years have decided to pass budgets designating fixed assets as part of the reserve, Frick said.
Bruce, who faces state charges of tax evasion in an unrelated case, could not be reached for comment.
This article has been corrected in this online archive. Originally, due to a reporting error, the tax-evasion case involving Bruce was incorrectly described. It is unrelated to the civil suit Bruce has
filed challenging the state’s method of calculating fiscal
reserves.
