Educators Claim Victory As Colo. Court Rejects Tax-Limit Interpretation

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The Colorado Supreme Court handed school districts a victory last week when it rejected a strict interpretation of a constitutional amendment that limits tax increases.

In its first case involving Amendment 1, a measure approved by voters in 1992, the state high court ruled unanimously that school districts and other local governments may seek voter approval to increase their bonded debt and to raise taxes to repay that debt as part of the same ballot measure.

Backers of Amendment 1 had sued the Boulder Valley school district last year over such a combined ballot question, arguing that Amendment 1 requires separate votes on new debt and tax hikes.

But the court ruled that "the incurrence of a debt and the adoption of taxes as the means with which to repay that debt are properly viewed as a single subject when presented together in one ballot issue."

"In most cases," the court added, "it might not be desirable that the debt question be adopted without the tax question."

'Extremely Significant'

Educators and bond experts said the case was important because the court rejected strict interpretations of Amendment 1that would make it harder for school districts to cope with the tax-limitation measure.

"It's extremely significant," said Lauren Kingsbery, a lawyer with the Colorado Association of School Boards. "The court seemed to indicate it is not going to let public entities get hung up on all the technicalities."

Rick Buddin, a bond lawyer with Kutak Rock in Denver, said the court "displayed an outlook that they were not going to interpret it radically, like the author wanted them to do. They are going to take a more reasonable interpretation."

Kutak Rock serves as bond counsel for the Boulder Valley district, as well as for the city and county of Boulder, which also faced challenges to bond and tax measures.

The supreme court's decision upholds voter approval in November 1993 of measures that raised the Boulder Valley district's debt by $98 million and increased taxes by about $20 million a year.

Kevin B. Pratt, the lawyer who represented the plaintiffs who challenged the election, said the ruling violates the intent of Amendment 1--making it more difficult for local governments to increase bonded debt and taxes.

Separate bond and tax measures "would restrain government better than having the two combined," he said.

Vol. 14, Issue 03

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