The Colorado Supreme Court, in a break with its long hostility to TABOR, finally did the right thing.
A version of this article was first published in Complete Colorado on December 8, 2025.
During 2025, Colorado appellate courts issued two important decisions construing the Taxpayer’s Bill of Rights (TABOR). One continued the judiciary’s long practice of defeating and weakening TABOR. The other decision, however, was a rare victory for the taxpayers.
Background
The Colorado Constitution, like the charters of almost all other states, includes terms restricting public debt, taxes, and spending. Such terms are called “tax and expenditure limitations” or “TELs.” State constitution-writers started to insert TELs during the mid 19th century, after several states went bankrupt from overspending. This helps explain why the Colorado constitution, as adopted in 1876, included some very strict TELs. One limited the state only to property taxes and mandated their gradual reduction over time. Others allowed voters to review certain financial decisions.
In the years after 1876, constitutional amendments and judicial pronouncements weakened Colorado’s TELs. So in 1992, voters added Article X, Section 20 to the state constitution. This is the section we call TABOR.
Article X, Section 20 features several kinds of limits, but best known are the mandatory referendum rules. Most new debt, new taxes, tax increases, and certain spending hikes must be approved by the voters.
Modern state courts have proven hostile to TELs. This certainly has been true in Colorado. In 2016, I researched and wrote an Independence Institute study of TABOR law. Although the study is now out-of-date, it showed that this state’s two primary appellate tribunals—the court of appeals and the supreme court—have issued many times more anti-TABOR rulings than pro-TABOR rulings.
With that background, let’s examine the two most important judicial pronouncements of 2025.
Americans for Prosperity v. Colorado
The Colorado constitution requires each lawmaker to take an oath “to support the constitution of the United States and of the state of Colorado” (Article V, Section 2(2)). Because TABOR is part of the state constitution, every lawmaker thereby swears solemnly to support it.
Since 2019, however, the Colorado General Assembly has been in the control of leftist zealots who have declared open war on TABOR. Earlier this year, for example, 44 of them sponsored a bill, since abandoned, to sue the taxpayers for a federal court order voiding TABOR. Another common tactic is to label tax hikes as “fees” to evade the need for voter approval. Still another is to abuse TABOR’s exemption for state enterprises.
TABOR’s drafters understood that governments sometimes operate businesses—such as hospitals and bus lines—supported by user fees rather than by taxes. They exempted these “enterprises” from TABOR’s rules.
So leftist policy makers increasingly pretend that core government services are “enterprises.” They simply move those services to separate accounts, and fund them with taxes labeled as “fees.” State courts have assisted this abuse by broadening the legal definition of fees.
In 2020, the voters responded by passing Proposition 117. That measure required new enterprises spending more than $100 million in their first five years of operation to be approved by popular vote. Two or more enterprises created simultaneously and “serving primarily the same purpose” were counted as a single unit for purposes of the $100 million limit.
Unfortunately, as often happens, the initiative’s sponsors wrote Proposition 117 without consulting with experts sufficiently experienced in writing ballot measures. They left a loophole that allowed anti-TABOR zealots to create multiple enterprises by narrowly defining the “purpose” of each. At the time, I predicted that the zealots would exploit this loophole and the courts would cooperate with the charade.
And so it happened. Almost immediately after the voters adopted Proposition 117, the zealots set to work destroying it.
They began with Senate Bill 21-260. Once enacted, this measure created four new enterprises and expanded a fifth. The bill supposedly promoted “transportation sustainability.” Three of its new enterprises subsidized electric vehicles. Another engaged in emission-reduction. The expanded enterprise would undertake bridge and tunnel projects.
Senate Bill 21-260 provided that the three enterprises designed to promote electric vehicles would do so in slightly different ways. Thus, lawmakers maintained the pretense that the three enterprises served different purposes.
But the legislative majority of self-styled “progressives” went even further. They skirted Article V, Section 21 of the state constitution, which requires that each bill, other than those appropriating money, contain only a single subject. Senate Bill 21-260 also reversed an earlier legislative action that reduced the legal spending limit.
Americans for Prosperity sued to end this sham. The plaintiffs argued that Senate Bill 21-260 violated Proposition 117, TABOR, and the single-subject rule.
The fraud in Senate Bill 21-260 was so evident that the case should have been an easy one for the taxpayers. Yet both the trial judge and the Court of Appeals ruled against them on all three issues.
In its opinion in Americans for Prosperity v. Colorado, the court of appeals treated the bogus “enterprises” as real ones—even though when TABOR was approved in 1992, no one would have recognized them as such. The court further ruled that, while three of the enterprises served the same goals, their “purposes” were sufficiently different to avoid Proposition 117.
Then—in a disturbing reversal—the judges also held that even though the enterprises served different purposes, those purposes were not sufficiently different to violate the single-subject rule. The court even classified the spending limit hike as within the same “subject” as restricting emissions and promoting electric vehicles!
Metropcs California, LLC v. City of Lakewood
Even more than the Americans for Prosperity case, Metropcs California, LLC v. City of Lakewood should have been a slam-dunk for the taxpayers. In 1969, the City of Lakewood enacted a tax on certain telecommunication businesses. In 1996, the city expanded the services and businesses subject to the tax. In 2015, it did so again. Both expansions were clearly “new taxes” as TABOR uses that phrase. But Lakewood ignored TABOR and never sent the new taxes to the voters.
The only reason the Lakewood case actually was not a slam dunk was that was to be decided by the Colorado Supreme Court, which almost always rules against TABOR.
But—mirabile dictu!—the justices finally did the right thing: They ruled unanimously that Lakewood’s 1996 and 2015 measures were new taxes and should have been reviewed by the voters. Pro-TABOR plaintiffs had accomplished an almost unheard feat: They actually had won in the Colorado Supreme Court!
Can We Explain the Split Decision?
When preparing my 2016 study, I documented judicial hostility to tax and spending limits. But I also learned that judges are more likely to understand why people should vote on taxes than why they should vote on expanding government.
So perhaps that helps explain the different results in the two cases: In Lakewood, the right to vote on taxes was at stake, while Americans for Prosperity involved “merely” the public’s right to veto more government.
