Tax Law

State Net Capitol Journal – January 19, 2015; Supreme Court To Decide Fate Of Colorado Taxpayer's Bill of Rights

Budget & Taxes

SUPREME COURT TO DECIDE FATE OF CO TABOR: Colorado's Taxpayer's Bill of Rights — requiring lawmakers to obtain voter approval to raise taxes and to issue refunds to taxpayers when revenues grow faster than inflation and population growth — has survived repeated challenges since it was approved by the state's voters in 1992. But the fate of the law is now in the hands of the U.S. Supreme Court.

The justices are scheduled this month to consider whether to hear a lawsuit originally filed in 2011 alleging that TABOR denies the Colorado government its "authority to tax" and, consequently, violates the U.S. Constitution's mandate that each state have "a republican form of government," in which the governing is done by elected representatives rather than directly by the people.

"Colorado is the only state in the history of the Republic to strip its state and local elected officials of the power to tax and so limit their ability to spend," the plaintiffs, who include Democrats Sen. Andy Kerr and House Speaker Dickey Lee Hullinghorst, wrote in their filings with the court.

Ilya Shapiro of the Cato Institute, which filed a brief last year opposing the plaintiff's argument, said the "republican" angle isn't one that "comes up too often" with "serious plaintiffs." But he admits it's been pretty successful so far.

"The fact that it is a serious [question] with good lawyers on both sides, and that [the lawsuit] has gone this far, is notable in itself," he said.

Attorneys for the state have asserted the plaintiffs are attempting to defy the will of the people.

"The People of Colorado have chosen to maintain a direct voice in the state's tax policy and overall level of appropriations. Plaintiffs here challenge that choice and ask the federal courts to undo it," they wrote in their court filings.

Gov. John Hickenlooper (D) appears to have mixed feelings about TABOR, saying last month that he supports refunding taxpayers the up to $200 million they could be entitled to this year under the law but bemoaning the bind the law puts on the state's budget.

"I'm not saying we should get rid of TABOR," the governor said. "I think people should have the right to vote. But they need to have the facts. Inflation plus population growth doesn't solve all the fiscal challenges we need." (DENVER POST, LEXISNEXIS STATE NET)

ADDICTION TREATMENT COULD BE KEY TO KEEPING MEDICAID COSTS DOWN: Pregnant women, children, the elderly and the disabled have long made up the bulk of Medicaid beneficiaries. But as a result of the expansion of Medicaid under the Affordable Care Act, younger and more able-bodied adults have been enrolling in the program. And one striking characteristic of that new population is its higher rate of drug and alcohol addiction.

As of May, the number of new Medicaid beneficiaries in California who had signed up for addiction services was up 30 percent. The number of adults receiving addiction treatment at Medicaid facilities in Washington doubled in the first six months of the year. And the number of Medicaid enrollees receiving such treatment nationwide could more than double, from 1.5 million to about 4 million, within the next five years.

The silver lining for states is that there is mounting evidence addiction treatment can dramatically lower physical health care costs for people with substance abuse problems. And with addiction treatment part of the overall plan for Medicaid, states can potentially improve health outcomes and reduce costs by better integrating physical and behavioral health.

"We're at the point where we're actually treating substance use illness the way we treat other illnesses," said Art Schut, CEO of Arapahoe House, the leading provider of drug and alcohol addiction services in Colorado. "There's a realization in the commercial and public marketplace that health outcomes are important and that SUD [substance use disorder] treatment contributes significantly to overall health. It's transformational for health care, not just substance use." (STATELINE.ORG)

BUDGETS IN BRIEF: The GOP-controlled WASHINGTON Senate adopted a rule last week requiring a two-thirds vote to bring bills creating new taxes to the floor for a final vote. Raising an existing tax still requires only a simple majority vote (NORTHWEST PUBLIC RADIO). • NEW JERSEY will receive a federal grant of as much as $29.4 million to help provide job training for unemployed casino workers in Atlantic City, according to the state's congressional delegation. The city lost four of its 12 casinos last year due to increased competition from gambling operations in neighboring states (NJ.COM). • MAINE Gov. Paul LePage (R) vowed to cut income taxes, reform welfare and reduce the size of the state's government over the next four years in his inaugural speech this month. "The people of Maine have told us that they want us to keep reforming government, they want better jobs, they want welfare reform, they want lower energy costs, lower taxes," he said. "They want a smaller, more efficient state government" (PORTLAND PRESS HERALD). • Last week NEW MEXICO Gov. Susana Martinez (R) proposed a $6.3 billion budget, calling for a $141 million, or 2.3 percent increase in state spending. Martinez said despite the state's uncertain revenue picture, education and job-creation programs need to be bolstered (ALBUQUERQUE JOURNAL NEWS, LEXISNEXIS STATE NET).

- Compiled by KOREY CLARK

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