A fee or a tax? Guarding TABOR against lawsuits

By Brian Vande Krol 

Guest Commentary

TABOR author Douglas Bruce collects political signs to be placed in high traffic areas of Colorado Springs rebuffing efforts against Referendum C, amending

TABOR author Douglas Bruce collects political signs to be placed in high traffic areas of Colorado Springs rebuffing efforts against Referendum C, amending TABOR, in November 2005. (Chuck Bigger, Special to The Denver Post)



To fee, or not to fee. That is the question.

Whether ’tis Nobler in the wallet to suffer

The Fees and Enterprises of outrageous Governance,

Or to file suits against CBE,

And by opposing end them?

A Colorado organization has filed an appeal to overturn a Denver District Court finding about the Taxpayer’s Bill of Rights (TABOR). We believe the trial court erred in finding that Colorado’s Bridge Enterprise (CBE) conforms to TABOR.

In 2010, the legislature created the CBE to repair and maintain bridges. The CBE was called an “enterprise” so it could issue debt without a vote of the people, as is otherwise required by TABOR. The CBE already has issued $300 million in debt and plans more (up to $1 billion).

An enterprise is a government-owned, self-supporting business, which is exempt from TABOR restrictions. The legislature also authorized the CBE to impose a new charge on vehicle registrations. Known as the bridge safety surcharge, it was designated for repair and maintenance of state-owned bridges. But the CBE had a problem. Because the charge is not a fee for service, it functioned like a tax, which requires a vote of the people.

Disinclined to allow Colorado’s constitution to stand in the way, the CBE called it a fee and hoped the label alone would be enough to avoid a tax election.

In 2012, the TABOR Foundation sued to reverse the tax and stop the issuance of more debt, arguing that the fee is actually a tax, and that the CBE is not a qualified enterprise and cannot issue debt without a vote of the citizens of Colorado.

If the bridge surcharge survives the legal challenge, the courts will have established a method by which government can fund most anything by creating enterprises, assessing fees, and issuing debt. They will have stripped Coloradans of their constitutionally protected rights under TABOR.

“There have been violations of basic common sense and principles of good government,” said TABOR Foundation chairman Penn Pfiffner. “The concept and construct of this dishonest and devious scheme must not stand.”

Unfortunately, the Denver District Court ruled in favor of the CBE. The TABOR Foundation appealed the decision and filed its opening brief on Jan. 21.

In the appeal, Mountain States Legal Foundation staff attorney Jim Manley, representing the TABOR Foundation, clearly refutes the trial court’s conclusions. Citing ample case law, the TABOR Foundation presented an appeal that should be difficult to deny. For example, it demonstrated that the district court’s decision would cause an “absurd result.”

The court ruled that the bridge surcharge is a fee because it is collected for a specific purpose, but using this illogic, any tax could be called a fee by declaring its specific purpose. For example, school property taxes could become “school fees.”

Supporters of TABOR suffered a minor setback on March 7, when a decision by the 10th U.S. Circuit Court of Appeals allowed another lawsuit to proceed. State representatives, including Andy Kerr and Dickie Lee Hullinghorst, sued Gov. John Hickenlooper to eviscerate TABOR and give legislators unchecked power to raise taxes. The lawsuit claims that TABOR violates the U.S. Constitution’s guarantee of a republican form of government. However, as constitutional law scholar Rob Natelson wrote, “Although most of the Founders were not devotees of direct democracy, they did make it clear that it was consistent with the republican form for the people to exercise the legislative power directly.” The Founders would have acknowledged TABOR as acceptable to a republican form of government.

The decision was only about standing, not the issues. The path to unlikely victory for that lawsuit is a long one. Now that it may return to trial, it will most certainly end up before the Supreme Court. In the meantime, success of the CBE lawsuit will provide a critical and timely check on outrageous governance.

Brian Vande Krol of Westminster is director of the TABOR Foundation.

Read more: A fee or a tax? Guarding TABOR against lawsuits – The Denver Post http://www.denverpost.com/opinion/ci_25394217/fee-or-tax-guarding-tabor-against-lawsuits#ixzz2wky6LCaG 
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