A high-profile policy-focused law firm has filed a last-minute challenge to try to keep the proposed graduated-income-tax measure off of the November ballot, arguing that it used unregistered petition circulators to get the required number of petition signatures.
The lawsuit, filed late Wednesday in Denver County District Court by former U.S. Attorney Jason Dunn on behalf of an Arapahoe County resident named Michael Hancock (not the former Denver mayor) asks the court to stop the Colorado Secretary of State from placing Initiative 195 onto this year’s ballot. The ballots must be ready to begin being mailed out by Oct. 2.
In the legal action, Dunn and fellow Brownstein Hyatt Farber Schreck LLP attorney David Meschke say that 9,849 signatures that Secretary of State Jena Griswold determined to be valid were collected by paid circulators who weren’t properly registered, didn’t submit training certificates or didn’t update their information properly. Because the Protect Colorado’s Future Coalition behind the ballot measure exceeded the minimum number of required signatures by only 6,700, this means that it would fall below the threshold if the signatures turned in by these petitioners were thrown out, as they should be, they argue.
“Thus, signatures obtained in support of Initiative #195 by Petition circulators who submitted defective affidavits were submitted to the Secretary in violation of rules intended to prevent fraud, abuse, and mistake in the petition process,” the lawsuit reads. “The Secretary’s Statement of Sufficiency should be modified to invalidate all signatures gathered by the identified 69 paid circulators that were submitted by the Proponents.”
Amendment proponents: “Rich and powerful” trying to halt question
Chris deGruy Kennedy, a former legislator who is now president/CEO of the Bell Policy Center and co-chair of Protect Colorado’s Future, said in a news release that he believes lobbyists behind the lawsuit are trying to silence the voices of voters pre-emptively.
“We are confident this challenge will be quickly dismissed,” deGruy Kennedy said. “Amendment 87 simply asks the wealthiest 3% (of residents) and giant corporations to pay their fair share. But rather than make their case to the public, lawyers for the rich and powerful are trying to kill it in a courtroom. It’s no surprise that they’re trying to take this choice away from voters, but we won’t let them win.”
Amendment 87, formerly known as Initiative 195, would replace Colorado’s 4.4% income-tax rate that is paid by all businesses and residents with a graduated system that would place higher rates onto companies and people who earn more. Those rates would reach as high as 8.4% for residents and businesses making more than $1 million per year, and the change in tax rates is expected to generate about $2 billion more annually that the state government could spend on education, healthcare and childcare.
Proponents argue that 97% of residents and 95% of businesses would not see a tax hike under the plan, as rates for those making $100,000 or less would drop to 4.2% (and to 3.8% for those making $25,000 or less).
Measure is one of two income-tax proposals slated to go to voters
However, business groups argue that with the tax burden falling more on higher-earning companies, those companies will be less likely to hire or expand in Colorado and that the recriminations of investing elsewhere will cost Colorado needed tax revenue.
The measure is slated to go onto the November ballot opposite Proposition 136 — a counterproposal from conservative organization Advance Colorado that would cap Colorado’s income tax at 4.4%. The debate over the two initiatives could establish state tax policy for decades to come after long-running debates over whether the state has enough resources to pay for critical government services.
In the lawsuit, attorneys said they identified 69 petition circulators for Initiative 196 who were not property registered and had not obtained a required training certificate. State law requires that none of the signatures gathered by them should be counted toward the sufficiency determination for the initiative.
Initiative 195 supporters submitted 165,765 signatures for the proposal — well more than the 124,238 valid signatures needed to get the constitutional amendment onto the ballot. However, Griswold’s office determined that 34,827 were invalid, leaving them with the margin of 6,700 signatures that the lawsuit seeks to put into question with its claims.