Opinion ID: 2506395
Heading Depth: 2
Heading Rank: 1

Heading: Subsection (4)(a)'s tax policy change language

Text: The plaintiffs' first argument is centered on subsection (4), which is entitled Required Elections and provides a list of actions that trigger an election requirement. It reads in relevant part: [D]istricts must have voter approval in advance for . . . any new tax, tax rate increase, mill levy above that for the prior year, valuation for assessment ratio increase for a property class, or extension of an expiring tax, or a tax policy change directly causing a net tax revenue gain to any district. Colo. Const. art. X, § 20(4)(a). The plaintiffs argue that SB 07-199 violated subsection (4)(a)'s language requiring advance voter approval of a tax policy change directly causing a net tax revenue gain to any district. This requirement is an undefined catch-all phrase attempting to encompass any district action that is the equivalent of a new tax or a tax rate change that would not be covered by the more specific requirements listed before it. We find that the plaintiffs' reliance on subsection (4)(a)'s tax policy change directly causing a net tax revenue gain language is misplaced. The plaintiffs' argument would, in effect, require two elections to waive a revenue limit; one election to fulfill the subsection (7) revenue limit waiver, and another election for later legislation directing the use of the funds received as a result of that waiver. We find that argument without merit. As an initial matter, we note that this language has never been interpreted by this court, so we aim to construe it in a way that provides some workable parameters. To this end, we find that to understand the language tax policy change in any real sense, it cannot be applied to any policy modifications that may have a de minimis impact on a district's revenues. [13] To apply the limit in such a broad manner would make any legislative action in the revenue arena nearly impossible and cripple the government's ability to function. In some cases, the cost of the election could exceed the additional revenue obtained, an absurd result that the voters could not have intended when they passed article X, section 20. We have consistently declined to adopt interpretations of article X, section 20 that would unreasonably curtail the everyday functions of government. See Havens v. Bd. Of County Comm'rs, 924 P.2d 517, 521 (Colo.1996); In re Submission of Interrogatories on House Bill 99-1325, 979 P.2d 549, 557 (Colo.1999). Subsection (4)(a) must be read in conjunction with the other provisions of article X, section 20; specifically, the subsection (7) revenue limits. When read together, it becomes apparent that a tax policy change directly causing a net tax revenue gain to any district only requires advance voter approval when the gain exceeds one of the subsection (7) revenue limits. Otherwise, the inclusion of the specific revenue limits would be unnecessary and redundant. To find that any tax policy change resulting in a net tax revenue gain, even one that does not violate the subsection (7) revenue limits, requires voter approval would eliminate the need for those detailed revenue limits entirely. Such an interpretation would create internal inconsistency and effectively read subsection (7) out of article X, section 20. To avoid such a result, we find that a tax policy change directly causing a net tax revenue gain only requires voter approval when the revenue gain exceeds the limits dictated by subsection (7). However, that does not indicate that subsection (4)(a) requires two elections in this case; i.e., one to waive a revenue limit and one to later direct use of the funds received as a result of that waiver. Here, the subsection (7)(c) revenue limit is at issue. As will be addressed later, the local school district elections validly waived that limit. We find that subsection (4)(a) does not require a second election, at either the local or state level, for legislation directing how revenue received as a result of a waiver election should be used.
First, subsection (4)(a) does not require a second election at the local level. Such a requirement would create unnecessary redundancy. We have been guided by a long standing rule of constitutional construction that provisions contained in this state's constitution are to be interpreted as a whole with effect given to every term contained therein. In re Interrogatories of the United States Dist. Ct. Pursuant to Rule 21.1, 642 P.2d 496, 497 (Colo.1982). We have routinely held that [i]n discharging our judicial function, we afford the language of constitutions and statutes their ordinary and common meaning. We ascertain and give effect to their intent. Bd. of County Comm'rs v. Vail Assocs., 19 P.3d 1263, 1273 (Colo.2001) (internal citations omitted). Article X, section 20 establishes a scheme of advance voter approval. The evident purpose of article X, section 20 is to limit the discretion of governmental officials to take certain taxing, revenue and spending actions in the absence of voter approval. Havens v. Bd. of County Comm'rs of County of Archuleta, 924 P.2d 517, 522 (Colo.1996). Interpreting article X, section 20 in a way that harmonizes its various provisions while at the same time providing for voter approval in advance, we find that an additional election under subsection (4)(a) is not required before the enactment of legislation directing the use of the funds received as a result of a valid waiver of the applicable subsection (7) revenue limit. This interpretation is in line with language contained in subsection (7)(d) that states, [v]oter approved revenue changes do not require a tax rate change. This declaratory sentence provides that if a district conducts a valid revenue limit waiver, it need not also conduct a tax rate change election. Once a revenue limit is validly waived, it is unnecessary to require a second election for later legislation directing the use of the additional funds that a district received as a result of the waiver election. Such legislation is not a policy change, but an implementation of the waiver election. Therefore, subsection (4)(a) did not require an additional election at the local school district level.
Second, SB 07-199 does not require an additional election at the state level. Article IX, section 15 of the Colorado Constitution requires local control of school districts. [14] This court has consistently found that local control requires a school district to have discretion over any instruction paid for with locally-raised funds. Owens v. Colo. Cong. Of Parents, Teachers and Students, 92 P.3d 933, 939 (Colo.2004) (citing School Dist. No. 16 v. Union High School No. 1, 60 Colo. 292, 293, 152 P. 1149 (1915)). This accords with our dual-funding precedent establishing that legislation requiring local districts to provide a share of jointly funded programs does not amount to the imposition or levy of a tax on those districts by the state. As long as the local share of the jointly funded program is applied solely to spending within the district and the local district retains substantial control over the expenditure of those funds, the local district remains the taxing entity. See Colorado Social Services, 697 P.2d at 11-12. In this case, the excess revenue is generated at the local district level, and is paid by local property taxpayers. It is not generated at the state level and does not implicate state taxpayers. Although under the School Finance Act the state dictates the overall scheme of school funding and the county performs the ministerial function of collecting taxes levied by the school district, the school district remains the relevant taxing authority. As such, the school district is the only district with the authority to change tax policy within the meaning of article X, section 20. The state cannot cause a tax policy change at the local district level. Therefore, the language of subsection (4)(a) does not require an additional vote at the state level. The Attorney General argues otherwise, relying on the language of subsection (4)(a) requiring voter approval in advance if a tax policy change will cause a net tax revenue gain to any district. Colo. Const. art. X, § 20(4)(a) (emphasis added). Recognizing that SB 07-199 was enacted at the state level and there was no actual net revenue gain to the state, the Attorney General maintains that a statewide election was required because SB 07-199 resulted in a net revenue gain to any district, i.e., the local school districts that had received prior approval from their voters were permitted to collect and expend more revenue. The Attorney General concludes that if subsection (4)(a) intended to limit a statewide vote to only those policy changes affecting a net gain in state tax revenues, subsection (4)(a) would have referenced a district rather than any district. Alternatively, he argues that by decreasing the amount it pays under the School Finance Act formula, the state effectively received a net revenue gain. Neither argument is persuasive. First, the textual argument distinguishing between a and any is untenable. Nothing in subsection (4)(a) indicates that the terms were used so precisely. The difference between the two words is far too subtle to be the basis for restricting the powers of the state legislature and imposing on the state the costs of statewide elections. This conclusion is reinforced by the use of the word any in the definition of district as including the state and any local government, Colo. Const. art. X, § 20(2)(b) (emphasis added). The word any is used in an identical manner as the word a would be. Second, we decline to expand the net revenue gain provision to include an effective net revenue gain. There would be no logical limit to such an expansion, and it would require us to read language into the constitutional provision that does not appear there. The provision of SB 07-199 at issue in this case, which affects the applicability of the property tax revenue limit as it is referenced in section 22-54-106(2)(a)(III), is specifically limited to those districts that passed a broadly worded waiver election. [15] SB 07-199 does not eliminate the revenue limit, but rather recognizes that the limit was previously waived by voters in the local school districts, which are the relevant districts for purposes of any article X, section 20 limit. As the Governor argues, any change occurred when the school districts voted, not when SB 07-199 was enacted. Later legislation directing the use of revenue received as a result of the waiver election does not require an additional election. Therefore, we find that the subsection (4)(a) language is not applicable to this case and SB 07-199 did not unconstitutionally cause a tax policy change directly causing a net tax revenue gain to any district without prior voter approval. The plaintiffs have not proved that SB 07-199 violated a constitutional provision.