A Denver District Court judge on Wednesday dismissed a lawsuit seeking to knock the graduated-income-tax-system-creating Amendment 87 off the November ballot, ruling that the failure of petition-collecting entities to register 66 circulators is not a high enough bar to invalidate the signatures they collected.
Those 10,860 signatures that were collected by the circulators in question are key because they were the difference between Amendment 87 having enough signatures to qualify for the ballot and to not qualify. While plaintiffs in the lawsuit still can appeal the case, the result allows the Colorado Secretary of State now to count all votes for and against the initiative, which is the biggest business measure going before voters this year.
Officials from Protect Colorado’s Future — the coalition of progressive organizations, conservation groups and education advocates working to pass the amendment — celebrated the ruling and criticized the lawsuit once again in a news release.
“This entire spectacle is an effort to distract Coloradans from the real question,” said Kiyana Powell, policy and research director for coalition member New Era Colorado. “The real question is whether Coloradans are ready to make the wealthiest pay their fair share. We believe they are.”
What Amendment 87 proposes
Amendment 87 seeks to replace Colorado’s flat 4.4% income tax rate for all businesses and residents with a graduated system in which companies and individuals reporting higher income are required to pay higher rates. While it would reduce income rates for those making $100,000 or less annually and keep rates the same for yearly income between $100,000 and $500,000, it would raise rates to 7.4% for income above $500,000, 7.9% for income above $750,000 and 8.4% for income above $1 million.
It’s become the centerpiece of election debate for many business leaders who fear that raising income tax rates at a time when Colorado is one of the most regulated states and one of the most expensive places to operate will be a backbreaker for many employers. Small businesses that reach $500,000 income levels more easily than individuals could have to make layoffs, and large companies could relocate or at least move future employment growth to more business-friendly states.
Backers of the initiative argue in turn that the new revenue generated by the higher tax rates — an estimated $2 billion or more in the first year — would fund the rising cost of Medicaid, budget-challenged K-12 schools and resource-limited early childhood education. Just 3% of residents and 5% of businesses would see tax hikes under the plan, they add, leaving higher earners to be forced to pay more.
Proposition 136 backer Kristi Burton Brown and Amendment 87 proponents Chris deGruy Kennedy discuss the dueling 2026 income-tax ballot measures on the “Colorado Chamber Office Hours” podcast.
Plaintiff alleges untrained, unregistered circulators
The lawsuit, filed by Brownstein Hyatt Farber Schreck attorneys on behalf of Aurora resident Michael Hancock (not the former Denver mayor), argued that the certification for Amendment 87 should be invalidated because of issues with petition collection. The legal action listed defendants as the primary proponents of Amendment 87 and Secretary of State Jena Griswold, who certified the sufficiency of the ballot measure.
Specifically, it alleged that 69 individuals who circulated petitions for the measure were not registered fully with the Secretary of State for circulating those petitions and that they had not received adequate paid circulator training. Invalidating the signatures they collected would leave the initiative short of the 124,238 valid signatures needed to make the ballot, as Griswold determined that just 130,938 of the 165,765 submitted signatures were valid, the lawsuit charged.
Denver District Court Judge Heidi Kutcher noted that after the complaint was filed last month, the Colorado Secretary of State’s Office produced training certificates for 65 of the circulators and found that one other was a volunteer rather than a paid circulator. The remaining three circulators had attended a training session given by an outside entity, and Kutcher found that plaintiffs had not proven any legal violations tied to those allegations.
Judge questions if lack of registration should invalidate signatures
On the question of registration, Kutcher found that 66 of the 69 circulators identified by plaintiffs were indeed not registered to circulate petitions for this initiative. On this claim, however, she asked further whether this violation was grave enough to toss out the signatures they collected and to deny voters the opportunity to vote on Amendment 87.
To argue that the signatures should be invalidated, Hancock and his attorneys based their claim on a rule adopted last year by the Secretary of State’s office that requires this registration of circulators by paid petition entities but does so primarily as a data-gathering tool, Kutcher noted. That tool has no identified aim toward preventing fraud, she wrote.
However, another section of law cited by Hancock and his attorneys provides for review of the Secretary of State’s statement of sufficiency on the grounds that an initiative doesn’t have enough signatures to go to the ballot. And that section does allow for a challenge arguing that a petition form that doesn’t comply with state rules — in this case, the requirement that circulators are properly registered — could violate a provision of the law that prevents fraud, mistake or abuse in the petition process.
In this claim, however, Kutcher argued that the failure to register those specific circulators was made by the petition-circulating entities that are registered by the Secretary of State’s office, not by either the Amendment 87 backers or by the petition circulators themselves. And the court agreed with argument by the Secretary of State’s Office that any failures by petition entities to register must be addressed through an administrative process, which the plaintiffs did not use.
Amendment 87, Proposition 136 clash
A person puts a ballot into an election box in front of a Colorado flag.
Furthermore, Kutcher wrote, the failure by petition entities to comply with state registration regulations is not a basis for invalidating petition signatures. Plaintiffs did not assert any fraudulent conduct by any petition entity or paid circulator and therefore failed to prove by a preponderance of evidence that noncompliance with circulator-registration rules constitutes fraud, mistake or abuse in the petition process, she said
“The Court also notes (Colorado Revised Statutes) 1-40-116(3) and the authorized regulation at Rule 15.1.4 identify when the Secretary may invalidate signatures. Those reasons do not include invalidating otherwise valid signatures of Registered Electors because a Paid Circulator was not fully registered with the Secretary through a licensed Petition Entity,” Kutcher wrote.
“To invalidate a signature that is otherwise a valid Registered Elector’s signature because a paid circulator was not registered by a licensed Petition Entity or registered for a specific initiative would place significant restrictions on the Registered Electors’ right to participate in the initiative process,” she added.
The decision comes less than two weeks before the Nov. 3 due date for voters to return ballots that were mailed to them or to cast their ballot on Election Day.
And it returns the focus of arguments around Amendment 87 and its countermeasure, Proposition 136, to the economic and budgetary impact that the proposals could have. Proposition 136 cements the 4.4% universal income-tax rate into law, stating that state officials cannot raise it above that level.