Colorado’s fledgling family and medical leave program does not violate the Taxpayer’s Bill of Rights amendment to the Colorado Constitution, the state supreme court ruled Tuesday.
The justices unanimously rejected the legal challenge to the newly voter-approved program, which will, beginning in 2024, offer up to 12 weeks of paid time off to most Colorado workers who are either sick or caring for their newborns or seriously ill family members.
Grand Junction construction company Chronos Builders challenged the program on the grounds that its funding mechanism violated the state’s Taxpayer Bill of Rights (TABOR). The $1.2 billion leave program will be funded through collections of between .45% and .9% of employees’ annual pay, with some exceptions. That premium could be increased to as much as 1.2% of wages after 2025.
Attorneys for Chronos Builders argued that the sliding-scale funding scheme violated TABOR, which mandates that all income “be taxed at one rate… with no added tax or surcharge.” Attorneys for the state countered that TABOR does not apply to the new program’s premiums.
The state Supreme Court agreed that TABOR does not apply, finding that the program’s funding is not an income tax or a surcharge forbidden by TABOR.
“The Act, a family and medical leave law, is not an income tax law or a change to such a law,” Justice Monica Márquez wrote for the court. “Moreover, the premium collected pursuant to the Act is a fee used to fund specific services, rather than a tax or comparable surcharge collected to defray general government expenses.”
The justices affirmed a district court’s previous decision to dismiss the case for failure to state a claim.
The widely expected decision was applauded Tuesday by organizations that supported the paid family and medical leave program, including A Better Balance, a national nonprofit advocacy organization that pushes for paid leave for caregivers, new mothers and others.
“We are pleased that the Colorado Supreme Court has endorsed the will of Colorado voters by ruling in favor of the State’s paid family and medical leave program,” staff attorney Natalie Petrucci said in a statement. “…No workers in Colorado should be forced to risk their pay or livelihoods in order to bond with a new child or address medical and family caregiving needs.”
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