A lawsuit that claims Colorado’s Taxpayer’s Bill of Rights violates federal constitutional guarantees of representative state government can proceed, a three-judge panel of the U.S. 10th Circuit Court of Appeals ruled Friday.

The suit, Kerr v. Hickenlooper, was filed in 2011, but the case has been focused on procedural issues up to now. The Friday ruling settles some of those.

The eventual outcomes of the case – which could be years away – could have important implications for state government operations and for school funding, the focus of intense debate during the current legislative session.

The TABOR amendment, passed by voters in 1992 and requires (among other things) voter approval for tax rate increases. The plaintiffs argue that violates provisions of the U.S. Constitution and the 19th century law making Colorado a state that guarantee a “republican” form of government, one in which elected representatives make legislative decisions, including on taxation.

The 32 plaintiffs include legislators, former lawmakers, other elected officials and private citizens. Some interesting names in the group include Lakewood Democratic Sen. Andy Kerr, chair of the Senate Education Committee; influential former GOP lawmaker Norma Anderson of Jefferson County and State Board of Education member Elaine Gantz Berman of Denver.

While the case has been pretty much below the public radar, it has drawn a lot of interest from public policy and advocacy groups on both the left and right. Among groups filing friend of the court briefs were the Colorado Association of School Boards, the Colorado Association of School Executives and the Colorado PTA.

Only two legal questions were at issue in the ruling – whether the plaintiffs have legal standing to file the suit and whether the case is a “political” matter that can’t be decided in court.

The appellate panel found the plaintiffs have standing and that the case isn’t automatically a political issue that should be thrown out at this point.

Read the ruling here.