1. Special District Association
We Love Our TABOR
Special District Association
Of Colorado
Annual Conference
September 12, 2018

2. Taxpayer’s Bill of Rights
History of TABOR
Taxpayer’s Bill of Rights

3. History of TABOR Douglas Bruce Passed November 1992 2000 words
Article X, Section 20, Colo. Constitution
Multiple Subjects
Spawned Extensive Litigation

4. Generally a district must have the following characteristics:
Applicability
TABOR coins the term “district” to describe the applicability of the amendment
The term “district” applies to the state or any local government, excluding enterprises
Generally a district must have the following characteristics:
Governmental in nature
Hold elections of the registered electors in the district
Independent Power to Tax
Police power (only one criteria in evaluating)

5. Purpose of TABOR
“Its preferred interpretation shall reasonably restrain most the growth of government”

6. Revenue and Expenditure
TABOR Overview
Vote on Taxes
Revenue and Expenditure
Limitations
Ratchet-down Effect

7. Multi-fiscal Year Debt
TABOR Overview
Refunds
Enterprises
Multi-fiscal Year Debt

8. TABOR Overview
Reserves
Emergency Reserves
Unfunded Mandates

9. Election Requirements
TABOR Overview
Property Tax Issues
“DeBrucing”
Election Requirements

10. Any tax policy change causing a net tax revenue increase
Vote on Taxes
New or Extended Tax
Increase a Tax Rate
Any tax policy change causing a net tax revenue increase

11. Vote on Taxes
“Valuation for assessment ratio increase for a property class. . .”
Any tax policy change causing a net tax revenue increase

12. Revenue Limits Must Establish Revenue Base
Can Increase by Voter Approved Revenue Increase
Base Will Increase Annually
 Net New Construction
 Inflation (Denver Boulder Index)

13. Spending Limits Spending Limits are Tied to Revenue Limits
Consequences are Tied to Revenue Limits
Unspent Revenue Under the Revenue Limit can be “Spent” into “Reserves.”
Reserves Can Be Spent

14. Exceptions to Limits Gifts Federal Funds Damage Awards
Sale of Property
Enterprises*

15. Collections for another government
Exceptions to Limits
Refunds
Collections for another government
Reserve Transfers
Or Expenditures*

16. Ratchet-DownEffect
In any year that revenue is less than the limit, a new limit is set
The new, lower limit can only be raised by voter approval or growth plus inflation
Spending limit becomes revenue limit plus eligible reserves*

17. Refunding Excess
Excess revenue must be “refunded in the next fiscal year unless voters approve a revenue change as an offset.”
Refund of any revenue “collected, kept, or spent illegally since four full fiscal years before a suit.”
 “Any Reasonable Method. . .”
“Need not be proportional when prior payments are impractical to identify”

18. Reserves Reserve increases are included in the revenue
base as revenue. . .
Revenue that exceeds the base cannot be “sanitized”
by calling it a “reserve.”
 Funds that are to go into a reserve account have been accounted for in the budget and are part of revenues.
If total expenditures are less than the limit, the difference can be “spent” into a reserve account.

19. Emergency Reserve
 TABOR requires that each district set aside an emergency reserve of 3% of annual revenue for emergencies.
Can only be used in case of an emergency, which is narrowly defined to mean primarily a natural disaster.
Must be maintained at 3% of TABOR revenue each year, and replenished if used.

20. “DeBrucing” “Voter Approved Revenue Change”
Can cover past excess revenue or future anticipated excess revenue
Voter Permission to keep and spend excess revenue
Can be general or specific

21. “Enterprise” “Government Owned Business”
Less than 10% of revenue from government grants
Authority to issue its own revenue bonds
Subject to annual evaluation

22. “Enterprise” “Enterprises not subject to TABOR”
Definition in TABOR not the same as in GAAP: requires different accounting
Designation as enterprise is not necessary, but recommended
Enterprise Status does not carry the power to impose taxes

23. “Enterprise” Special District cannot “be” an enterprise
The District may “own” the enterprise
The District cannot give to the enterprise its governmental powers, ie., to tax, and hold elections
Enterprises are generally those that are financed by “fee-for-service activities

24. Property Tax Issues  Taxes  vs. Fees   Gallagher Amendment 
 5.5% Limitation

25. Multifiscal-Year Obligation is prohibited without voter approval
“Multi- Year Debt”
Multifiscal-Year Obligation is prohibited without voter approval
Can be voter approved, such as issuing bonds
Exception:
If funds to cover the entire obligation are placed in escrow
If the debt is annually renewal by the district: ie., lease purchases