Colorado AG Ignores CORA Request Citing Active Litigation, Setting Potentially Dangerous Precedent

The Colorado Open Records Act (CORA) requires nearly all public records be made available to the public except for a few exceptions. But, according to the Colorado Department of Law, if an individual or entity is in litigation with the state, they’re no longer allowed to utilize CORA to secure any public documents.

Cause of Action Institute (CoA Institute) represents the TABOR Foundation and three other plaintiffs in a lawsuit against the state of Colorado and several state agencies challenging the constitutionality of the state’s Hospital Provider Charge, which the state imposes on Colorado hospitals to increase Medicaid funding from the federal government. Although some documents from the government have been provided to the plaintiffs in discovery, CoA Institute also filed a CORA request for records that should, in part or full, be released under CORA.

In response, the state of Colorado’s Department of Law stated that it had already provided all documents responsive to the CORA request in discovery, but it also took the position that it need not respond at all to the CORA request because of the ongoing litigation.

In our view, the state’s response misapplies the applicable law and, if left unchallenged, could establish a dangerous precedent as it relates to transparency and the use of CORA.  In other words, if the position taken by the Colorado Department of Law is adopted in other matters, entities that have ongoing litigation before the state could be prevented from using CORA to supplement and investigate the facts relevant to their cases. This anti-transparency policy has obvious negative implications for media outlets and government watchdog organizations to conduct their vital work.

Matt Frendewey is the Director of Communications at Cause of Action Institute.



Click here to visit the TABOR project page.
Click here to download the original CORA records request and subsequent denial letter.
Click here to download CoA’s response to the CORA request denial letter.

CoA Institute Moves for Summary Judgment in TABOR Case Challenging Hospital Tax

Cause of Action Institute has moved for summary judgment asking the Colorado state district court to rule that, as a matter of law, Colorado violated the Taxpayer’s Bill of Rights (TABOR) and other constitutional provisions when it levied $4.5 billion in hospital taxes without a vote of the people.

TABOR requires that the state legislature obtain Coloradans’ consent before it raises taxes. This constitutional amendment was approved by the voters in 1992 and it continues to be a leading issue in election races statewide.  It was designed not only to restrain the growth of government, but also to give Coloradans a voice when lawmakers attempt to reach into their pockets. Yet since its passage, legislators and governors of both parties have consistently refused to ask voters for more money. Instead, they use convoluted tactics to avoid using the ballot to raise taxes. Some of these tactics include mortgaging state buildings, eliminating tax breaks, and trying to disguise tax increases as fees administered by “enterprises,” state-run entities whose revenues do not count towards TABOR’s revenue cap.

This practice might make it easier for legislators to spend, but it runs contrary to the will of the voters, of whom only 26% disapprove of TABOR. And there is little reason to believe that voters will never approve a tax increase; a ballot measure in 2015 allowing the state to keep $67 million it had over-collected won with wide voter support.

In 2009, as the Affordable Care Act neared passage, the legislature enacted a hospital provider tax, which exploits the federal Medicaid fund-matching scheme to draw down more money to the state. Normally, when a state reimburses a health care provider who gives medical services to a patient who can’t afford healthcare, the federal government matches some percentage of those costs. But with the hospital provider tax in place, the hospital’s costs are artificially increased. When reporting that cost to the federal government, the state then receives matching funds for the inflated price of healthcare, rather than the actual cost to the hospital.

This scheme doesn’t just amount to quasi-money laundering – it also creates perverse incentives for hospitals, who might not choose the most cost-effective care, and legislators, who use Medicaid expansion to fill state coffers.

The scam worked well for the better part of a decade, but in 2016, the state was facing a budget crunch; the newest round of taxes was expected to take Colorado’s revenue collection past the TABOR cap, and it seemed likely that the governor would have to cut funds to higher education or transportation, an essential budget item in a snow-heavy state like Colorado. The governor could have instead cut the fee on the hospitals, but that would have decreased the federal matching funds.

Rather than send a revenue increase to voters for permission, as TABOR requires, the legislature and the governor instead passed SB 17-267, subtitled “Concerning the sustainability of rural Colorado.” The bill, among other things, set up the Colorado Healthcare Affordability and Sustainability Enterprise (CHASE). As with many of Colorado’s enterprises, CHASE was an attempt by the state legislature to avoid its duties under TABOR. To exempt the hospital provider tax from the TABOR revenue cap, the legislature threw an ill-fitting “enterprise” label onto the administration of the tax and the federal matching funds.

In response to this attempt to dodge accountability to the public, the TABOR Foundation, a non-profit educational organization whose mission is to protect TABOR, sued CHASE and the Colorado Department of Health Care Policy and Financing in 2015. According to Penn Pfiffner, President of the TABOR Foundation:

“The Hospital Provider program was built on a lie, then made much worse. The people should get a final vote on tax increases and new government debt, but that was taken from them in a dishonest power grab by elected officials.”

The Foundation argues that the Hospital Provider Charge was a tax that had been levied without the requisite TABOR vote, and that CHASE is an illegal enterprise because its fees are not charged to hospitals based on services provided.

Recently, Cause of Action Institute took on the representation of the TABOR Foundation and the other plaintiffs in the case and will request summary judgment from the Colorado district court. Hopefully, this suit at minimum will indicate to lawmakers that the state might find tax policy to be less onerous (and litigious) if, next time, they simply follow their state constitution and ask voters for permission.

Yesterday’s motion for summary judgment can be viewed here.

Jake Carmin is a law clerk at Cause of Action Institute.

Follow the Coverage: TABOR Foundation v. Colorado Dep’t of Health Care Policy & Financing



In The News:



Cause of Action Institute Representing TABOR Foundation in Suit Challenging Colorado Hospital Provider Tax

Washington, DC – July 3, 2018 – Cause of Action Institute today announced that it is taking on the representation of the TABOR Foundation in its ongoing lawsuit TABOR Foundation, et al. v. Colorado Department of Health Care Policy & Financing, et al.  The case argues that the state has violated Colorado’s Taxpayer’s Bill of Rights (“TABOR”) by using a hospital provider tax to artificially increase costs and then collect higher reimbursements from the federal government under Medicaid.

“TABOR requires that the state get consent from the people before raising taxes.  But for the past eight years the state of Colorado has been taxing hospitals by hundreds of millions of dollars to fleece the federal government without the required TABOR vote.  The TABOR Foundation is rightly pushing back on the sweetheart deal that leaves taxpayers stuck with the bill,” said James Valvo, Counsel and Senior Policy Advisor at Cause of Action Institute.

“The people of Colorado are confronted with actions taken by the legislature and the governor to damage their constitution.  The Hospital Provider program was built on a lie, then made much worse.   The people should get a final vote on tax increases and new government debt, but that was taken from them in a dishonest power grab by elected officials,” said Penn R. Pfiffner, Chairman of the TABOR Foundation.  “The TABOR Foundation is grateful that Cause of Action Institute has stepped in to allow this lawsuit to go forward.  Its participation supports all the citizens of Colorado to reverse the corrupt government actions and to allow the people once again to control their state government.”

TABOR Foundation v. Colorado Department of Health Care Policy & Financing is an ongoing Colorado state court lawsuit that began in 2015 challenging a hospital provider tax levied by the state and used to increase Medicaid reimbursements. Under TABOR, new taxes cannot be collected without a vote of the people. The TABOR Foundation’s challenge argues that the hospital provider charge, that is currently reimbursed under Medicaid from the federal government, is in fact a tax and violates the TABOR amendment in Colorado’s state constitution because the state did not hold the required vote.

The case also argues Senate Bill 17-267, which converted the hospital provider tax from the Department to a newly created enterprise, violated the Colorado constitution’s single-subject requirement and failed to comply with the state excess revenue cap, which limits the amount of revenue the state can keep and spend.

Cause of Action Institute will be requesting summary judgment from the Colorado state district court on behalf of the Plaintiffs.

For more information, please contact Mary Beth Gombita,

Court Filings: TABOR Foundation v. Colorado Dep’t of Health Care Policy & Financing

Read important filings and follow updates in the case:

August 20, 2018: Defendants-Intervenor’s Reply in Support of its Motion for Summ. J.

August 20, 2018: State Defendants’ Reply in Support of Cross-Motion for Summ. J.

August 20, 2018: Plaintiffs’ Reply in Support of their Motion for Summ. J.

August 6, 2018: Defendant-Intervenor’s Response to Plaintiffs’ Motion for Summ. J.

August 6, 2018: State Defendants’ Response to Plaintiffs’ Motion for Summ. J.

August 6, 2018: Plaintiffs’ Response to Defendants’ Motion for Summary Judgment

July 16, 2018: State Defendants’ Motion for Summary Judgment

July 16, 2018: Defendant-Intervenor’s Motion for Summary Judgment 

July 16, 2018: Plaintiffs’ Motion for Summary Judgment

December 19, 2017: Second Amended and Supplemented Complaint