Mill levy lawsuit, started in Grand Junction, heats up in Denver

By Marija B. Vader
Free Press Staff Writer
May 8, 2008

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    A trial in the lawsuit pitting Mesa County, a Grand Junction business owner and others against Gov. Bill Ritter and the Colorado Department of Education should wrap up with final arguments Friday.

    Evan Gluckman, who owns Main Street Cafe, testified, as did Marsha Neal, former Mesa County Valley School District 51 board member and president.

    At issue is Senate Bill 199, passed last year by the state Legislature, that froze mill levies.

    Approved by voters in 1992, the Taxpayers Bill of Rights, or TABOR, requires voter approval before any policy change that would cause an increase in taxes within a political subdivision like a city or county.

    The following year, in a direct response to TABOR, the state approved the School Finance Act, which outlined that as property values go up, mill levies decrease, the lawsuit reads. That typically results in people paying about the same amount in taxes.

    But with SB-199, mill levies remain the same. And with that, as valuations increase, so do property taxes.

    Commissioners filed suit because they have to certify mill levies every year. They felt they would violate the state Constitution if they were to certify the mill levies as if they were frozen.

    Attorneys for the state argued SB-199 created no change in tax policy and there was no net revenue gain, said Mesa County Commissioner Janet Rowland.

    The county’s attorney, Richard Westfall, argued SB-199 did change state tax policy, and the state would make an estimated $114 million annually — around $8 million alone from Mesa County taxpayers — as a result of it, so there was a net revenue gain, Rowland said.

    Rowland testified and has attended the trial, held in the Denver city and county building.

    At one point Tuesday, District Judge Christine Habas asked Colorado State Treasurer Cary Kennedy if the new law created a change in tax policy, Rowland said.

    She answered in the affirmative, Rowland reported.

    “It was clear the state was in the wrong in doing that,” Rowland said.

    SB-199 does not allocate more money for schools, Rowland said.

    Now, the Mesa County school district receives about $6,000 per student — from local property owners and from the state. Whatever the property owners don’t raise toward that $6,000 per student, the state fills in.

    With SB-199, local property taxes increase and the state portion decreases.

    In Mesa County, that would amount to $8 million, he said.

    “God only knows what it’s spending it on,” Rowland said.

    Closing arguments will be Friday morning.

    Reach Marija B. Vader at mvader@gjfreepress.com.