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Conservatives file lawsuit to invalidate Colorado’s new transportation fees. Here’s what it claims.

Senate Bill 260, passed by Democrats in 2021, enacted new fees on gasoline purchases, deliveries and Uber and Lyft rides to raise billions for transportation projects

Traffic flows along Interstate 70 west of Floyd Hill in Clear Creek County on Wednesday, Feb. 23, 2022. (Andy Colwell, Special to The Colorado Sun)
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Colorado’s new transportation fees violate the Taxpayer’s Bill of Rights and several other state finance laws and should be invalidated, two conservative groups and Republican state Sen. Jerry Sonnenberg claim in a long-promised lawsuit filed late Thursday in Denver.

Senate Bill 260, passed by Democrats in the legislature last year, enacted a host of new transportation fees — including on gasoline purchases, deliveries and Uber and Lyft rides — to raise money for road and transit projects across the state. 

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Democrats celebrated the measure as a partial solution to Colorado’s longstanding transportation funding deficit, but Republicans decried it as an unlawful attempt to get around TABOR’s requirement that voters approve new taxes.

“The legislature’s sleight of hand is illegal,” the 14-page lawsuit claims.

 The new fees under Senate Bill 260 include: 

  • 2 cents per gallon on gasoline and diesel fuel starting in July 2022 that increases 1 cent every year up to 8 cents
  • 27 cents on deliveries, including those from Amazon, FedEx and Grubhub
  • 30 cents on Uber and Lyft rides starting in 2022 that would increase based on the federal Consumer Price Index, which tracks the prices of consumer goods and services. The fee would be cut in half for people carpooling in a rideshare, or riding in an electric vehicle.

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The measure is forecast to generate $5 billion for transportation projects over the next 11 years and is aimed at chipping away at Colorado’s multibillion-dollar road funding deficit. There are also a number of provisions meant to reduce greenhouse gas emissions.

“Senate Bill 260 clearly violates Colorado’s Taxpayer’s Bill of Rights and Proposition 117,” Jesse Mallory, who runs the Colorado branch of Americans for Prosperity, said in a written statement. 

Americans for Prosperity and Advance Colorado Institute, through its executive director, Michael Fields, are the two groups behind the lawsuit. Another plaintiff is Richard Orman, a former prosecutor in the 18th Judicial District.

Gov. Jared Polis and several state agencies and enterprises are named as defendants.

“We’re not going to comment on pending litigation related to this bipartisan transportation bill that is going to finally fix our damn roads,” said Conor Cahill, a spokesman for Polis. “But obviously we all agree that there should be federal gas tax relief and the governor has also proposed state gas fee relief.”

Gov. Jared Polis signs Senate Bill 260 into law while surrounded by supporters of the measure. (Jesse Paul, The Colorado Sun)

The lawsuit argues Senate Bill 260 violates Proposition 117, which was approved by voters in 2020 and requires voter approval for the creation of certain new enterprises, which are funded by fee revenue. Specifically, voter approval is required if the new enterprise is expected to generate more than $100 million in revenue in its first five fiscal years. No voter approval was sought for the fees enacted under Senate Bill 270 and the five new enterprises created under Senate Bill 260 are expected, in aggregate, to exceed $100 million revenue within two fiscal years.

Democrats have argued that Senate Bill 260 does not violate Proposition 117, in part because much of the revenue generated under the measure would go toward existing enterprises.

MORE: Read the lawsuit here.

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The lawsuit also argues that Senate Bill 260 violated Colorado’s so-called “single-subject rule,” which requires measures to be limited to one topic. Since the legislation dealt with both transportation funding and included a provision increasing the Taxpayer’s Bill of Rights cap on government spending, the plaintiffs argue it addresses more than a single subject.

Finally, the legal action alleges the legislature violated the state constitution when it raised the cap set by TABOR and Referendum C, a ballot measure passed in 2005 that increased the limit, since it didn’t have the authority to do so.



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