Opinion ID: 2506395
Heading Depth: 2
Heading Rank: 2

Heading: Subsection (7)(c)'s Property Tax Revenue Limit

Text: Having found that SB 07-199 does not require a second election under subsection (4)(a) if the relevant revenue limit was validly waived, we now turn to whether the local school district waiver elections fulfilled the election requirements of subsection (7). The plaintiffs assert that SB 07-199 violated the property tax revenue limit imposed by subsection (7)(c) without advance voter approval. First, they argue the local school district elections do not constitute the required voter approval because there is nothing in any of those waiver elections informing voters that a yes vote could cause an increase in property taxes or impact the property tax revenue limit of subsection (7)(c). Second, the plaintiffs contend that voter intent at the waiver elections establishes that property tax revenues were not intended to be included in the waiver. Third, they argue that the CDE's subsequent interpretationthat the School Finance Act required the maintenance of subsection (7)(c)'s revenue limitestablishes that the waiver elections did not provide proper authorization for SB 07-199. We find none of the plaintiffs' arguments overcomes the presumption of constitutionality. First, although the plaintiffs assert that the local school district waiver elections do not satisfy the voter approval in advance requirements of subsection (7)(c), nothing in that section imposes specific requirements on the form or content of voter approval. Subsection (7)(c) simply requires that there be voter approval in advance. Second, the plaintiffs' reliance on voter intent cannot overcome the straightforward language of the ballot issues authorizing the waiver of all revenue limits imposed by article X, section 20. Third, the argument that the CDE's subsequent maintenance of the limit establishes that the limit was not waived by the elections fails to realize that the CDE's interpretation cannot supersede the General Assembly's legislation. We will now address each argument individually.
The plaintiffs first assert that the local school district waiver elections do not constitute the required advance voter approval because they provided no notice to voters that a yes vote could impact their property taxes. They insist that because the waiver elections did not specifically reference the property tax revenue limit, that limit was not waived. As noted, 174 of the 178 school districts in Colorado held successful, broadly worded waiver elections. The ballot measures at issue in these elections referred to collecting and expending all revenues or full revenues from whatever source, notwithstanding the limitations of article X, section 20. The scope of these waivers was unlimited as to the source of the revenue. The district court agreed with the plaintiffs and found that the language of subsections (7)(c) and (d) established that changes in revenue and changes in property tax revenue must be treated differently. The court then held that the waiver elections at issue only met the requirements for revenue in general, and not property tax revenue. In essence, the court read into subsection (7)(c) specific voter approval language requirements for removing the property tax revenue limitation, and found that the local school district waiver elections did not meet those requirements. In reaching this conclusion, the court incorrectly interpreted the constitution and failed to give full force and effect to the waiver elections. Subsection (7)(c) simply states that the property tax revenue limit can only be adjusted by revenue changes approved by the voters without specifying any particulars about what kind of voter approval in advance is required. Applying the constitutional language by its clear terms, we determine that there are no specific voter approval language requirements in subsection (7). The only specific ballot language requirements of article X, section 20 are contained in subsection (3), [16] which is not at issue in this case. The inclusion of such specific ballot language elsewhere, however, points to the fact that the drafters could have included specific ballot language in this type of situation if they had chosen to do so. In the absence of any such language requirement, a district has the discretion to fashion an appropriate ballot question. With this understanding, we find our precedent established in Havens applicable. In Havens, we held that subsection (7)(d) mandates one of two outcomes when one of the limits established in sub-subsections (a) through (c) is exceeded. 924 P.2d at 523-24. Either the excess revenues are to be refunded or they may be retained and expended if the voters so approve. Id. Havens concerned a revenue waiver election held by Archuleta County containing language very similar to the waiver elections at issue in this case. We held that such wording in a revenue limit waiver clearly provides that the County may retain and expend the excess revenues it collects. Id. at 522. We did not require specific ballot language. In the case now before us, we again find that a broadly worded, voter-approved waiver of revenue limits, authorizing school districts to collect and retain all revenues notwithstanding the limitations of article X, section 20, does just that, with no restrictions or language requirements. In each of the 174 districts, voters waived all revenue limitations imposed by article X, section 20, and we will respect the General Assembly's interpretation that these elections provided the authority to implement SB 07-199 in the absence of clear provisions to the contrary. Id. The plaintiffs assert that our precedent established in Bickel v. City of Boulder, 885 P.2d 215 (Colo.1994), and Bolt v. Arapahoe County School District No. 6, 898 P.2d 525 (Colo.1995), requires that any voter approval in advance must involve approval of the specific tax policy change that is causing the net tax revenue gain. This is a misinterpretation of those holdings. Bickel and Bolt both dealt with mill levy increases, not the removal of a revenue limit, which is at issue here. In Bolt, we stated that article X, section 20, subsection (4) only requires voter approval for those taxes which are either new or represent increases from the previous year. Bolt, 898 P.2d at 534. In this case, there is neither a new tax nor a tax rate increase at issue, but the removal of a revenue limit. Moreover, we held in Bickel that even in the context of the specific ballot language requirements of subsection (3)requirements that are not at issue in this casea substantial compliance standard should be used to review claims brought to enforce article X, section 20's election provisions. Bickel, 885 P.2d at 227. As relevant here, those cases merely establish that a substantial compliance standard applies to article X, section 20 voting requirements. Because there are no specific language requirements for this type of waiver election, the individual school district waiver elections that reference all or full revenues substantially comply with the general requirements of subsection (7). In examining the plain language, we do not `read a statute to create an exception that the plain language does not suggest, warrant, or mandate.' Bruce v. City of Colorado Springs, 129 P.3d 988, 993 (Colo.2006) (quoting Town of Telluride v. Lot Thirty-Four Venture, L.L.C., 3 P.3d 30, 35 (Colo.2000)). Therefore, the plaintiffs failed to prove that the waiver elections at issue violated a constitutional provision.
The plaintiffs next argue that even if no specific ballot language was required to waive the subsection (7)(c) revenue limitation, voter intent in those elections demonstrates that the property tax revenue limit was not waived. We reject this argument. The district court incorrectly utilized evidence such as election notice language to determine voter intent. This extrinsic evidence is irrelevant to our inquiry; outside evidence cannot contradict and override the text of the ballot question. The scope of the waiver is determined by the straightforward text of the ballot issues themselves, and not by what the plaintiffs insist was the actual intent of the voters. [Ballot measures] are not subject to the same drafting processes as statutes. Nonetheless, we apply generally accepted principles, such as according words their plain or common meaning. Id. Voters in this case evaluated ballot questions containing unambiguous terms such as all or full. The straightforward wording of the ballot questions governs our analysis of whether they fulfilled the substantial compliance requirements. Unless the language is ambiguous, we give effect to the plain language of the ballot question. See generally In re Title, Ballot Title, Submission Clause, and Summary for 2005-2006 No. 75, 138 P.3d 267 (Colo.2006). Moreover, although irrelevant to our inquiry, we note that most of the evidence offered on voter intent came from individuals who participated in the drafting of the ballot questions at issue or were otherwise interested in the election. This court has held that when interpreting constitutional amendments adopted by ballot initiatives, any intent of the proponents that is not adequately expressed in the language of the measure will not govern the court's construction of the amendment. In re Interrogatories Relating to the Great Outdoors Colo. Trust Fund, 913 P.2d 533, 540 (Colo.1996). The same reasoning holds true for the constitutional revenue limit waiver elections at issue here. The intent of the drafters, not expressed in the language of [the ballot initiative], is not relevant to our inquiry. Davidson v. Sandstrom, 83 P.3d 648, 655 (Colo.2004). The straightforward language of the ballot questions was what was in front of the voters at the waiver elections, and we will apply that language. Reliance on the ballot language is especially important for these ballot issues because article X, section 20 relies on voters to make important financial decisions. The issues are often complex, as they are in this case, and article X, section 20 provides minimal guidance to taxing authorities seeking voter approval. To make this form of direct democracy work, districts must be able to rely on the language of the ballot issues. It strains credulity to argue that references to all revenues or full revenues did not include property tax revenues when the ballot measures only applied to school districts and it is common knowledge that the great majority of local funding for schools comes from property tax revenues. [17] It seems logical to assume that voters who waived the limits on all revenues understood it to apply to the greatest portion of those revenues, property taxes, and not simply peripheral funding sources. The record shows that school districts found themselves facing the revenue limits shortly after article X, section 20 became effective. The ultimate consequences of those limits may have been unknown, but the school districts deliberately undertook broad based waiver elections to eliminate all revenue limits that were currently and could possibly affect them in the future. SB 07-199 gave full force and effect to these expansive waivers, and applied them to the subsection (7)(c) limit. Our conclusion is supported by the plaintiffs' argument itself. Insisting that property taxes were not intended to be affected as a result of the various waiver elections, the plaintiffs cite assorted pro-statements from the elections and offer testimony from individual voters. However, even though irrelevant, this evidence shows only that the voters did not intend to raise property tax rates. For example, the Poudre School District pro-statement expressed that the waiver election was aimed at allowing the school district to collect, keep and spend funds received from existing sources and existing taxes. That is exactly what happened in Poudre School District. The property tax at issue was an existing tax. The waiver election removed the subsection (7)(c) limit requiring mill levies to be reduced if property tax revenues exceeded the revenue limits imposed by article X, section 20. The only reason that property tax revenues increased in certain areas after those waivers were applied was because property values in those districts increased, not because new taxes were established or tax rates increased. In essence, it is similar to an individual's income tax liability where the amount of taxes owed may increase or decrease because the taxpayer's income increases or decreases. Such a fluctuation in one's tax liability could not reasonably be considered a tax rate change. Similarly, an increase or decrease in property tax liability due to fluctuations in the value of the underlying property is not a tax rate change. Rather, the waiver of the revenue limit defined in subsection (7)(c), a change that is specifically allowed by subsection (7)(d) (Voter-approved revenue changes do not require a tax rate change), is at issue. What the plaintiffs fail to appreciate is that property taxes were not increased as a result of SB 07-199. SB 07-199 did not establish a new tax or increase tax rates; it maintained some existing rates when they otherwise would have decreased and actually reduced others that fell under the newly imposed twenty-seven mill limit. SB 07-199 simply applied these broad based waivers passed by school districts according to their language and we find that none of plaintiff's assertions establish that a constitutional provision was violated in doing so.
The plaintiffs next contend that the maintenance of the growth-plus-inflation limit of subsection (7)(c) after a school district passed a successful waiver election establishes that the property tax revenue limit was not implicated by those elections. In other words, they question why the removal of the property tax revenue limit required the proactive passage of SB 07-199, while the limits on other revenue streams were immediately lifted by the waiver elections. As previously detailed, SB 07-199 did not remove the property tax revenue limit, and therefore did not need voter approval itself. The waiver elections were effective immediately and gave the school districts, which are the relevant taxing authorities, the right to receive property tax revenue above the subsection (7)(c) limit. However, this result was not implemented because of the manner in which the CDE administered the School Finance Act. Rather than recognizing that all limits had been waived immediately after each successful election occurred, the CDE continued to advise school districts to certify mill levies in accordance with the property tax revenue limit of subsection (7)(c), and to reduce their mill levies when property tax revenues rose faster than the revenue limits permitted. Eventually, the erosion of the local share of public school funding came to the legislature's attention. To rectify the situation, the legislature amended the School Finance Act. That amendment, SB 07-199, provided the CDE with clear statutory direction to allow school districts to implement the earlier elections and retain property tax revenue above the waived revenue limit. There were no time limits included in the waiver elections that would bar the General Assembly from acting at a later date. The voters in 174 of 178 school districts approved ballot language allowing their school districts to retain and spend all revenues, notwithstanding the limitations of article X, section 20. Although the full effect of these waivers was not realized immediately, the delay does not undercut the validity of SB 07-199. The fact that the CDE and the local school districts continued to reference the waived property tax revenue limit when setting mill levies does not give rise to any rights that were violated by the enactment of SB 07-199. The delay in implementing the waiver elections may have caused harm to the state, or to the school districts, but it caused no harm to property taxpayers like those who brought this suit. If anything, the delay benefited local property taxpayers and harmed state taxpayers. Therefore, we find that SB 07-199 did not unconstitutionally violate the subsection (7)(c) property tax revenue limit. Once again, the plaintiffs failed to prove that SB 07-199 violated a constitutional provision.