A quartet of plaintiffs — including a state senator and the national organization Americans for Prosperity — filed a lawsuit Thursday to nullify the five fees created by the Colorado Legislature to generate most of the revenue for last year’s $5.3 billion transportation funding bill.
If the lawsuit, filed in Denver District Court against Gov. Jared Polis and the five enterprises created by Senate Bill 21-260, were to be successful, it would effectively gut the state’s plans for funding everything from bridge repairs to bus-fleet electrification. The legal action also seeks to nix a provision of the bill, passed on a mostly partisan basis, that raised the Taxpayer’s Bill of Rights cap on the amount of tax revenue the state can generate annually for its general fund, by $224 million.
Democrats viewed the bill as a signature piece of legislation, arguing that it created the first sustainable source of funding for transportation infrastructure in some 25 years. It set forth more than $1 billion in new funding for roads but also established fees whose proceeds will electrify the transportation system via new charging stations and grants to make zero-emission vehicles more accessible and will boost transit funding, and it put into place new environmental regulations requiring highway expansions to remove greenhouse gas emissions.
Those fees, however, were a primary reason that the bill generated fierce Republican opposition, and the lawsuit — filed by fiscal conservatism advocate AFP as well as by GOP state Sen. Jerry Sonnenberg of Sterling, Advance Colorado Institute President Michael Fields and state resident Richard Orman — argues they are unconstitutional.
Lee Steven, senior policy counsel for the Americans for Prosperity Foundation, explained in an interview that the suit argues that the creation or bolstering of five separate fee-based enterprises funding everything from trucking-fleet electrification to tunnel repairs, violates Proposition 117, which statewide voters approved in 2020. The initiative requires voters to approve any new enterprise that raises more than $100 million over its first five years.
SB 260 sponsors explained last year that they set up each of the enterprises to generate less than that amount in their first five years, thereby complying with the new law. However, the lawsuit claims that because the enterprises were created simultaneously, Proposition 117 requires their revenues to be aggregated, thus meaning that they would have to receive voter approval before being enacted — and that the TABOR cap would have to be adjusted downward to reflect the new enterprises, which didn’t happen.
The lawsuit also argues that a provision of the bill that raised the overall TABOR cap by $224 million also should have been subject to a vote of the people and violated the rule that bills adhere to a single subject to be constitutional. The plaintiffs have asked a judge to declare that each of the five new fees is invalid and to nullify the raising of the TABOR cap.
“Whether you call them fees or taxes, it’s a huge hit to Colorado taxpayers,” Steven said of SB 260. “Requiring the approval of voters is an important aspect of letting taxpayers know what the legislators are trying to do … If people knew what these were, they might not vote for them. We think this is a fairly obvious attempt to evade a constitutional requirement.”
A spokesman for Gov. Polis immediately declined to comment on the specifics of the lawsuit but pushed back on its premise as Polis also is pushing the state government to delay one of the fees on gas for a year and is pushing the federal government to suspend its gas tax.
“We’re not going to comment on pending litigation related to this bipartisan transportation bill that is going to finally fix our **bleep** roads, but obviously we all agree that there should be federal gas tax relief, and the governor has also proposed state gas fee relief now," press secretary Conor Cahill said in an email to Denver Business Journal on Friday.
SB 260 imposed a new fee on gasoline sales that acts like the gas tax, a new fee on diesel fuel sales, a new per-ride fee on transportation network companies like Uber and Lyft and a fee on retail delivery companies ranging from Amazon to DoorDash. All the fees are slated to begin on July 1, though Polis has asked legislators to pass a bill suspending the road-access fee on gas sales for one more year while fuel prices remain high.
The five enterprises, funded by a combination of fees, that the lawsuit seeks to invalidate are:
- The Community Access Enterprise, which will fund the development of electric vehicle charging infrastructure and more widespread adoption of electric vehicles.
- The Clean Fleet Enterprise, which will provide assistance for the conversion of government and private-sector fleets into electric vehicles.
- The Clean Transit Enterprise, which will fund public transit electrification.
- The Nonattainment Area Air Pollution Mitigation Enterprise, which will fund projects to reduce traffic and air pollution along the Front Range corridor that is out of federal compliance on ozone standards.
- The Statewide Bridge Enterprise, which funds bridge and tunnel repairs.
