Legal Corner: Ending local subsidies for state programs under TABOR

Colorado’s dire budget situation in recent years has frustrated the ability of the General Assembly to create new programs at the state level and led to raids on grant funds relied on by local governments. Those budget limitations, however, haven’t stopped the long and ignoble tradition of adding costly requirements to municipal operations to achieve the state’s policy goals.  

 

Section 9 of the Taxpayer Bill of Rights (TABOR) might offer a way to reject the state’s abuse of local authority and local taxpayer funds. The General Assembly and executive branch have blithely disregarded statutory provisions restricting unfunded state mandates in new laws and regulations. C.R.S. §§ 29-1-304.5; 24-4-103(2.7). Last week, the Colorado Court of Appeals held that the unfunded mandate statute did not make the obligation to provide body cam footage optional when the state didn’t provide funding for its mandate. SMB Advertising, Inc. v. City of Boulder, 2026CA25 (Apr. 9, 2026). But TABOR, as a constitutional provision, offers a unique mechanism to protect local budgets from state interference.
 

 

 

CML has described Section 9 as “intended as a major defensive weapon for local governments in any future intergovernmental strife.” TABOR: A Guide to the Taxpayer’s Bill of Rights 56 (2018 ed.). Article 10, Section 9 of the Colorado Constitution reads:  

 

 

The 1992 Blue Book summary for the TABOR amendment (Amendment 1) included few references to Section 9. One comment in favor of the amendment included noting that the provision “prevents state government from forcing programs onto the local level without their approval and without proper funding” and that the amendment “improves the ability of local government and citizens to control their own affairs and requires greater fiscal responsibility at each level of government.”                                                 

 

The General Assembly passed legislation in 1993 to implement Section 9. First, Senate Bill 93-78 enacted C.R.S. § 29-1-304.7, primarily to restrict how counties could use Section 9. The law prohibited the use of Section 9 to end subsidies for programs that are “inherent powers, duties, or functions” of county officers created in the state constitution or that are constitutionally required to be administered by a local district, like the state court system. Requirements to contribute to programs of agencies or officers outside of the district’s jurisdiction were declared not to be a delegation. 

 

Second, Senate Bill 93-74 established procedures for exercising Section 9 at C.R.S. § 29-1-304.8. Written notice must be provided to the governor and certain legislators and executive administrators. The notice must identify the program and the local government’s intention, as well as the amount of the reduction and the effective date. The reduction must occur over three years in equal annual amounts. The Department of Local Affairs is authorized to conduct rulemaking but does not appear to have done so.
 

 

 

Despite its great promise, municipalities don’t appear to have taken advantage of the major defensive weapon of Section 9. A few counties tried to reject state mandates using Section 9 but were quickly rebuffed by the courts. In 1993, Weld County attempted to end local funding for social services and Mesa County attempted to end funding for courthouse facilities and sheriff services at its courthouse. 

 

Instead of trying to understand and implement what voters intended in adopting Section 9, the Colorado Supreme Court undermined the amendment itself by focusing on “the state-county relationship” rather than the words of the amendment. Romer v. BOCC for Weld County, 897 P.2d 779 (Colo. 1995); see also Norton v. BOCC of Mesa County, 897 P.2d 788 (1995). The Court found that the county’s effort to rely on Section 9 was “not a legal possibility” because the county was part of the state as a political subdivision of the state and could not subsidize itself. The county’s authority to tax locally to pay for programs was derived from the state. (Curiously, Romer was a 3-2 decision, with two justices not participating, but Norton, decided the same day, was a 6-1 decision.) 

 

Whether these cases would inhibit municipalities is unclear. Chief Justice Rovira, dissenting in Romer, argued that the holding would apply to statutory and home rule municipalities. See 897 P.2d at 786. But while municipalities are considered political subdivisions, there is no question that municipalities are distinct from the state in many substantive ways. They may not be considered part of the administrative organization of the state in the same way as counties.  

 

Validating the enactment of the home rule amendment in 1902, the Colorado Supreme Court recognized that municipalities are formed voluntarily by residents “mainly for the interest, advantage, and convenience of the locality and its people” People ex rel. Elder v. Sours, 74 P. 167, 171 (1903) (citing 1 Dillon's Municipal Corporations, § 23); see also  BOCC of El Paso County v. Bish, 33 P. 184, 466-67 (Colo. 1893), overruled on other grounds.  The Court has recognized that home rule municipalities, at least, are distinct from counties with respect to the purpose of carrying out the will of the state. See BOCC of La Plata County v. Bowen/Edwards Associates, 830 P.2d 1045, 1055 (Colo. 1992). Municipalities also raise revenue for local purposes – they control their finances and appropriate funds for municipal purposes and to pay the expenses of the municipality. C.R.S. § 31-15-302. Home rule municipalities, unlike counties, derive their authority to tax from Article XX of the Colorado Constitution. Further, the Colorado Constitution generally does not require any programs to be administered by municipalities. For these reasons, municipalities should be understood to be distinct from counties that are intended to implement state policies. 

 

 

Municipalities are defined to be “districts” under TABOR. But other undefined terms in Section 9 likely would be considered ambiguous by the courts, especially what would be considered a “subsidy” or a “program” and what it means for a program to be “delegated ... for administration.” If the courts were forced to give some meaning to Section 9 for municipalities, these terms would need to be interpreted. 

 

Section 9 should be considered in light of the so-called “unfunded mandate” statute, C.R.S. § 29-1-304.5, which was enacted in 1991, just one year before TABOR. See Romer, 897 P.2d at 785 (Roviro, C.J., dissenting). In Romer, the Court declined to accept this result, but the dissent’s argument remains relevant: “a subsidy is financial assistance or payment by a local government ... for a state mandated program ...  delegated to the local government ... by the General Assembly for administration. This interpretation defines subsidy in its most logical and common-sense terms resulting in a coherent and unambiguous construction.” Id. 

 

Courts may consider a “program” and a “subsidy” to be similar to the concept of new state mandates and increased levels of service (i.e., a program) that become optional unless the state reimburses “the costs of such new state mandate or such increased level of service” (i.e., a subsidy). The concept of a “mandate” in that law includes “any legal requirement established by statutory provision or administrative rule or regulation which requires any local government to undertake a specific activity or to provide a specific service which satisfies minimum state standards” and includes “program mandates” relating to the activities to be performed and their quality and quantity as well as the procedural requirements for “providing programs and services.”  

 

Municipalities also may be able to identify delegated programs easily in some cases. Often, though, instead of creating state programs, the General Assembly avoids the burdens of creating and implementing state policy by co-opting local governing bodies and their administrative staff. Frequently, laws mandate the use of legislative discretion by directing governing bodies to adopt and enforce specific regulatory programs (e.g., energy codes and other building codes, land use processes and zoning standards, etc.). Further, it is possible, though unlikely, that some programs may be constitutionally required to be performed by a municipality. 

 

Section 9 also seems to contemplate the subsidy be a specific amount of money and not a generic concept of increased fiscal impact. Municipalities would need to identify the actual cost of any program and then, under Senate Bill 93-74, reduce the amount in installments over three years. Section 9 likely offers only limited opportunities for a municipality to simply reject a mandate or program in its entirety.
  

 

 

Rejecting mandates under Section 9 of TABOR would require a substantial amount of political will and legal expense for a municipality. Even if the opportunity arises, Colorado’s courts have shown an exceptional willingness to ignore Section 9 and efforts to restrict unfunded mandates. 

 

Still, the challenge might be worthwhile. Colorado’s 2026 budget bills introduced in early April include nearly $200 million in cuts to grant funds that municipal taxpayers contribute to and municipalities rely on to deliver critical projects. That adds to a nearly $140 million reduction in available funding in the state’s FY2025 budget. Add again recent direct reductions to local revenue (in the name of state-imposed property tax relief) without adequate backfill and decades of imposing new unfunded mandates on municipal government operations. 

 

Section 9 might make the most sense in tandem with asserting rights under the unfunded mandate statute, which might be viewed as a form of a spending limit that cannot be weakened without voter approval under TABOR. See TABOR: A Guide to the Taxpayer’s Bill of Rights 57 (2018 ed.) (cautioning that exercising Section 9 may implicate other TABOR provisions requiring local fiscal adjustments). Oddly, last week’s decision in SMB Advertising failed to consider the impact of Section 9 on the unfunded mandate statute.  

 

Expending local revenue to accomplish state purposes, not the purposes of the municipality, violates both the spirit and the plain letter of TABOR Section 9. Municipalities exist for and are governed and largely funded by their residents for their own convenience, not to bear the costs of implementing the will of the General Assembly. At some point, courts may again be called on to review the question it avoided in Romer and require the state to pay for the costs of the programs and policies it puts forward within the confines of its own balanced budget. 

This column is not intended and should not be taken as legal advice. Municipal officials are always encouraged to consult with their own attorneys.