PTI Files Class Action Lawsuit in Logan County Over Unconstitutional Tax Increase

An allegedly unconstitutional tax increase doubling a local water district’s mill levy is being challenged in a class action lawsuit filed last week on behalf of residents in four Eastern Plains counties.

According to a Nov. 11 news release, the suit was filed in Logan County District Court by the Public Trust Institute, a Colorado-based public interest law firm, and the National Taxpayers Union Foundation, a Washington D.C.-based taxpayer advocacy group.

The suit centers on a Lower South Platte Water Conservation District tax increase in 2019 that doubled the mill levy from 0.5 mills to 1 mill — without seeking the constitutionally required vote of the people it serves, according to the release and lawsuit. The district serves residents in Logan, Morgan, Sedgwick and Washington counties. 

Under The Taxpayers Bill of Rights, added to the Colorado Constitution in 1992, all mill levy increases must be submitted for voter approval.

According to the release, when district taxpayers complained about the tax increase never going before the voters, district officials said a 1996 election where voters allowed the district to keep excess tax revenues justified bypassing the vote. PTI asserts that the referendum stipulated the revenue retention was conditioned on the fact “that no local tax rate or property mill levy shall be increased at any time, nor shall any new tax be imposed, without the prior approval of the voters of the [LSPWCD].”

PTI alleges in the suit that the LSPWCD has collected the higher taxes from residents in both 2020 and 2021 and has refused to admit its error and order a vote on the mill levy increase.

“If the water district believes it needs a tax increase, then it must come to us voters and ask for it,” said Jim Aranci of Logan County in the Nov. 11 release. “That’s the clearest requirement in TABOR, and their action shows a blatant disrespect for the taxpayers they are supposed to serve.”

“It’s a shame that we have to go to court to enforce our basic taxpayer rights under the state constitution, but the water district believes it can write its own laws,” said former Fort Morgan Mayor Jack Darnell in the release. “Even worse is that they point to a twenty-five-year-old vote as a fig leaf and that very referendum says specifically that they won’t raise taxes without a vote.” 

“It’s hard to find a case of a local jurisdiction with a greater contempt for its own taxpayers and the clear Constitutional requirement for a vote on tax increases,” said Dan Burrows, PTI legal director, in the release. “It is vital that taxpayers stand up for their fundamental rights and we are very proud to represent these property owners who have been unconstitutionally taxed.”

“This case is not just about the property owners in this district, but about whether essential taxpayer protections can be ignored,” said NTUF Vice President Joe Bishop-Henchman in the Nov. 11 release. “They illegally collected the taxes and won’t refund the money, so someone has to hold them accountable.”

The other plaintiffs in the case are Chuck Miller, Bill Lauck and Curt Werner.

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