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Citizens for Envtl. Inquiry v. Department of Envtl. Quality

ELR Citation: 40 ELR 20049
Nos. No. 286773, (Mich. Ct. App., 02/09/2010)

A Colorado appellate court reversed a lower court decision to hold that the Colorado Taxpayer Bill of Rights (TABOR) prevented the state from increasing the coal removal tax rate without prior voter approval. The tax rate is determined by a statutory formula, whereby a base rate is periodically adjusted based on changes to a broad economic index. This formula was in effect at the time voters passed TABOR. Fifteen years later, the state promulgated regulations providing that, in accordance with the statute, the tax rate would be adjusted based on the economic index. Plaintiffs—several coal companies and a mining association—challenged the state’s decision to use the statutory formula on the grounds that it violated TABOR by, among other things, causing a “tax rate increase” without voter approval. The court agreed. Nothing in TABOR distinguishes between whether a tax rate is increased directly by a statute or indirectly through application of a statutory formula tied to an outside index beyond the taxpayers’ control. A tax rate increase requires voter approval in either situation.