A years-old lawsuit could delay a critical piece of funding for the widening of Interstate 25 between Monument and Castle Rock, possibly pushing back the start of construction.
The hangup stems from a 2015 lawsuit filed by the TABOR Foundation against the state over the constitutionality of Colorado's hospital provider fee.
Last December, the foundation argued that a new state law - one that's expected to generate nearly $2 billion for the I-25 widening and other transportation projects around the state - is also unconstitutional, according to an amended complaint filed in Denver District Court.
Colorado's Transportation Commission has tentatively allocated about $250 million of that money to the widening of the roughly 18-mile stretch from Monument to Castle Rock known as the "Gap."
But the state treasurer has said he's hesitant to authorize those funds while the lawsuit is pending, and transportation officials don't have a backup plan to cover construction costs in the meantime, Michael Lewis, the Colorado Department of Transportation's executive director, said at a meeting Wednesday in Colorado Springs.
El Paso County Commissioner Mark Waller, who has pushed to speed the widening, said Thursday that he's not worried about the outcome of the lawsuit, but is concerned about its potential to interfere with the project timeline.
"It's going to get dismissed, but it's disruptive until it does," Waller told The Gazette after he broached the subject with Lewis at the meeting.
The lawsuit is set to go to trial in late October, and a motion to dismiss filed by the state is still pending.
The case could stretch into next year - or beyond if the TABOR Foundation loses and appeals, Lewis said at the Pikes Peak Area Council of Governments' regular meeting.
CDOT has said construction on the Gap project could begin this summer or fall if state and local officials secure all the funding for the $350 million project, including a highly competitive $65 million grant that will be decided this spring. CDOT wants to add a pair of toll lanes, widening the highway from two to three lanes in each direction.
Some local residents and public officials have opposed adding toll lanes, arguing it amounts to double taxation after local governments agreed to kick in $35 million in taxpayer dollars to the project.
The law that the TABOR Foundation is challenging, Senate Bill 267, is intended to generate funding through the sale of state-owned buildings to private investors, who will immediately lease those buildings back to the state. As part of that plan, state Treasurer Walker Stapleton is to issue certificates of participation, which are similar to bonds but don't require voter approval, as soon as July 1. The proceeds are then allotted to capitol and transportation projects, including the Gap.
In a statement, Stapleton was vague about when he might begin issuing those certificates.
"We intend to comply with the law, and we will be ready to move forward with the transaction once the important questions raised in the lawsuit are resolved," he said.
CDOT originally expected to see funding from Senate Bill 267 in the summer or fall, spokeswoman Amy Ford said in an email.
"We are determining what the impact might be to available dollars to begin construction," Ford said in an email, adding that CDOT is communicating with Stapleton's office.
Waller said he's hoping the state will either resolve the case "sooner rather than later," or make the funds available before the lawsuit wraps up.
The TABOR Foundation's lawyers asked to be removed from the case, so the judge is now giving the organization time to find new counsel, Annie Skinner, a spokeswoman for the Colorado attorney general, said in a statement.
The foundation aims to defend an amendment to the Colorado Constitution known as the Taxpayer's Bill of Rights, or TABOR, authored by former state legislator and El Paso County commissioner Douglas Bruce. TABOR requires that voters approve tax increases, restricts the government's ability to borrow money and limits government growth by tying increases in government revenues to population growth and inflation.
The foundation's initial lawsuit claimed that the hospital provider fee violated the provisions of TABOR because it amounted to a new tax that was not approved by voters.
The fee - restructured and reclassified under Senate Bill 267 - is collected from hospitals, matched with federal dollars, and redistributed to hospitals to help them cover costs to care for uninsured patients and those paying with Medicaid.
In its amended complaint, the foundation argues that the new law violates a provision of the Colorado Constitution that limits each bill to one subject. Senate Bill 267 covered transportation funding, the hospital provider fee, and numerous other policies.
Penn Pfiffner, the chairman's foundation, said the issue at hand is not the widening of the highway, but the state's inability to follow its own laws.
"You gotta play the game by the rules," he said. "The General Assembly decided to do something that was terribly unconstitutional, to break its trust with the citizens, ignore the rules."
Contact Rachel Riley: 636-0108