Attorney General John Suthers Announces Dismissal of "Cash Funds" Lawsuit

DENVER – Attorney General John Suthers today announced the dismissal of the “Cash Funds” lawsuit filed against Gov. Owens and Treasurer Coffman last year. Suthers relayed the decision in a letter to Gov. Owens, Treasurer Coffman, Senate President Fitz-Gerald and House Speaker Romanoff.

The suit challenged legislation passed by the General Assembly and signed by Gov. Owens directing the Treasurer to transfer money from thirty-one Cash Funds to the General Fund during fiscal years 2001-02 through 2003-04. The Plaintiffs argued that the legislation authorizing the transfers violated the TABOR Amendment and article XI of the Colorado Constitution by creating illegal debt. However, the Denver District Court concluded that the Plaintiffs had standing to challenge transfers from only two of the thirty-one Cash Funds identified in the suit: a $3.2 million transfer from the Real Estate Recovery Fund, and a $4 million transfer from the Petroleum Storage Tank Fund.

The Court ultimately ruled that the transfers from these two funds were constitutional. Specifically, the court found that: 1) the transfers did not create illegal debt in violation of article XI of the Colorado Constitution; 2) the Cash Funds are not “trust funds” requiring repayment by the General Assembly; and 3) the transfers were not a new tax or change in tax policy that would require a public vote under TABOR.

The case is captioned Barber v. Owens, 04CV6602.

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