Negating Democratic Consent

How the Colorado Supreme Court has nullified Colorado constitutional limits on taxes, debt, and corporate privilege.

Colorado's 1876 Constitution is replete with provisions to prohibit corporate welfare, special privileges for government-favored big business, and government debt without voter consent. The protections have been fortified and extended by constitutional amendment, most notably in the 1992 Taxpayer's Bill of Rights. Yet for the past century, the Colorado Supreme Court, usually in cooperation with the other two branches, has nullified the taxpayer protections of the Colorado Constitution. This sad story is told in my new article for the Denver University Law Review's annual Tenth Circuit Symposium, Negating Democratic Consent: How the Colorado Supreme Court has Nullified Colorado Constitutional Limits on Taxes, Debt, and Corporate Privilege, 102 Denver Univ. Law Review 449 (2025). (The symposium includes states law articles on 10th Circuit states.)

For example, Colorado Constitution article XI, section 1, forbids government debt on behalf of corporations in the most comprehensive language possible:

Neither the state, nor any county, city, town, township or school district shall lend or pledge the credit or faith thereof, directly or indirectly, in any manner to, or in aid of, any person, company or corporation, public or private, for any amount, or for any purpose whatever; or become responsible for any debt, contract or liability of any person, company or corporation, public or private, in or out of the state.

The next section of the Constitution, article XI, section 2, also uses the broadest language possible to outlaw government aid to corporations:

Neither the state, nor any county, city, town, township, or school district shall make any donation or grant to, or in aid of, or become a subscriber to, or shareholder in any corporation or company or a joint owner with any person, company, or corporation, public or private, in or out of the state . . .

The statutory text contains certain narrow exceptions. For example, a government might acquire ownership of a corporation by forfeiture or escheat. By constitutional amendment, the people have created other exceptions, allowing for a government student loan programs and for government investment in energy industries.

The Colorado Supreme Court, however, has usurped for itself the power of constitutional amendment. Today, the Court does not enforce the text of the anti-corporate welfare sections of the Colorado Constitution, with their blanket language such as "directly or indirectly, in any manner to, or in aid of." Instead, according to the court, all corporate welfare is permissible whenever the legislature rationally believes that the welfare might have some beneficial effects. The plain text of the Colorado Constitution has in effect been replaced by the court's lawless imposition of a rational basis test that legalizes precisely what the Colorado Constitution was enacted to forbid.

A similar tale of judicial nullification can be told about the other Colorado Constitution prohibitions against special privileges:

• article V, section 25 (no special legislation),
• article II, section 11 (no laws granting special irrevocable privileges)
• article II, section 28 (no extra compensation to officers, employees, or contractors),
• article II, section 34 (no appropriations to private institutions).

The same is true for all of article XI's limitations on government debt:

• sections 3 (public debt of the state),
• section 4 (debt may be no longer than 15 years),
• section 5 (vote on debt for public buildings), and
• section 6 (local government debt limits).

Likewise, the Colorado Supreme Court has ranged far and wide in nullifying the 1992 Taxpayer's Bill of Rights (TABOR), article X, section 20:

• TABOR's text provides its own standard of review: the "preferred interpretation shall reasonably restrain most the growth of government."But the Colorado Supreme Court has replaced the constitutional text with its own test, requiring that a violation of TABOR be proven beyond a reasonable doubt -- a standard that means the government always wins.
• While TABOR applies to taxes (such as sales taxes) but not to "fees" (such as towel rental at a recreation center), the Colorado Supreme Court has ruled that the government can call a sales tax or any other tax a "fee" and thereby dispense with the need for voter approval.
• TABOR applies to all government units, except for "enterprises"; enterprises support themselves by selling services, rather than being dependent on tax revenue. For example, if a municipal recreation center does not need taxpayer support because it earns enough to support itself by charging fees to persons who exercise at the recreation center, the center can set its own prices. The Colorado Supreme Court, however, has allowed the "enterprise" exemption to be applied to fictitious entities that receive all of their income from Colorado tax revenue, with no connection between the persons who are taxed to support the "enterprise" and the benefits provided by the enterprise.
• According to TABOR, tax policy changes that increase net government revenue require voter approval. So does repeal of any of the pre-TABOR prior limits on taxes and spending. Yet the courts have nullified both of these protections by inventing a rule that they do not apply as long as the tax and spending increases do not cause the government to exceed TABOR's revenue caps.
• TABOR's main means of enforcement is citizen lawsuits, but these are hampered by the supreme court's interpretation that attorney fees for victorious plaintiffs are optional, not mandatory.
• While TABOR provides that local governments have the authority to opt out of some state government mandates, the supreme court has held that counties may never opt out.
• Finally, TABOR authorizes voters to allow four-year waivers on tax and spending limits. The courts, though have held that waivers are permanent, even when they were expressly presented to the voters as temporary.
• In fact, ballot measures that expressly promised no increase in mill levies for property taxes have been implausibly construed as voter permission for increases in mill levies, resulting in the largest property tax increase in state history being imposed without a vote of the people.

Here is the abstract of the article:

The Constitution of the State of Colorado strictly limits the Colorado government's power to impose taxes and incur debt, including by requiring voter approval of higher taxes and new debt. Government debt must be approved by taxpayers and is subject to a debt cap, with a time limit of fifteen years for construction debt. The Colorado constitution also forbids governments to grant special privileges to businesses. For example, governments may not pledge their credit to benefit corporations, may not otherwise go into business with corporations, may not enact special laws forthe benefit of a particular business, may not give extra uncontracted benefits to state employees or contractors, may not appropriate taxpayer funds to private businesses, and may not grant businesses irrevocable privileges. The Colorado constitution also includes the Taxpayer's Bill of Rights, which requires voter approval tax increases and for spending increases that  exceed the rate of inflation plus population growth. However, every one of these restrictions has been effectively nullified, usually with the blessing of the Colorado Supreme Court. Rather than the fair, equal, and democratic state created by the Colorado constitution, Colorado has been turned into a welfare state for the politically powerful, intentionally operating to ignore the constitutional mechanisms for the consent of the governed.

As enacted by the people, the Colorado Constitution"protected the inarticulate against machinators," in the words of dissenting Justice Hilliard in a 1934 case on government debt. Johnson v. McDonald, 49 P.2d 1017, 1034 (Colo. 1935) (Hilliard, J., dissenting). However, the Colorado Supreme Court in fiscal matters protects the machinators against the people.