If a person wants to build a single-family home within the Pagosa Springs town limits, he or she must pay $3,342 in Town “impact fees.” That money is purportedly earmarked for the “impacts” that the new residents — who will occupy this new house — will have on roads, recreation facilities, public buildings, parks, trails, emergency services and schools. (Assuming that the people who will occupy this new house haven’t already lived in Pagosa for maybe 25 years.)
The justification typically offered for such fees, is: “growth must pay for growth.”
We are working, here, under the assumption that there is a difference between a “tax” and a “fee.” The Colorado Constitution specifically requires voter approval for tax increases, and for the creation of a new tax — but no such voter approval is required for fee increases, or for the creation of a new fee.
Obviously, the difference is of some significance, here in Colorado.
A recent Colorado lawsuit can help us understand how one particular panel of judges defined the difference between a “tax” and a “fee.”
In 2009, during a particularly difficult period in the financial life of the Colorado state government, the state legislature created a new government agency called the Colorado Bridge Enterprise (CBE). The agency began charging a new “fee” as part of your vehicle registration fee; the money was (purportedly) to be used for repairing state-maintained bridges. The state did not seek voter approval for the new surcharge.
In 2012, the TABOR Foundation filed a lawsuit against the state, arguing that the “fee” was in fact a “tax” — and was thus prohibited by the state’s Taxpayer Bill of Rights (TABOR) unless approved by the state’s voters. During the deliberations, the Colorado Court of Appeals disagreed with one of the TABOR Foundation’s arguments: that the surcharge is a “tax” because it is collected without regard to any services used by the vehicles for which the charge is imposed.
The court laid out three factors that it weighed in determining whether a surcharge is a tax or a fee:
Colorado’s unique tax law — the Taxpayer’s Bill of Rights, or TABOR — will likely become a point of conversation and contention during much of 2016 in both the legislative session and at the ballot box.
Gov. John Hickenlooper’s budget request attributed some of the need for millions of dollars in cuts to the constitutional amendment that is seen by some as too restrictive a way to govern Colorado’s spending.
Movement is already afoot to make change. As an example, a nonpartisan group of state leaders called Building a Better Colorado has been traveling Colorado this year to find consensus on a possible ballot initiative in November to change parts of TABOR.
In addition, state Democrat lawmakers have said they plan to bring back last year’s failed hospital provider fee bill, a potential work-around TABOR to create wiggle room in the state’s budget. The hospital provider fee, which is assessed on hospitals to help pay for indigent health care, has raised so much money that it has bolstered state budgets past TABOR limits, requiring the state to issue taxpayer refunds. Continue reading
It was a bad week for the Taxpayer’s Bill of Rights and it doesn’t look like it’s going to recover any time soon under the Colorado court system.
Two TABOR-based suits were rejected, one by the intermediate Court of Appeals and another by Denver District Judge A. Bruce Jones.
The Colorado Union of Taxpayers Foundation had sued the city of Aspen in 2012 on grounds that its city council imposed a 20-cent charge on disposable grocery bags instead of putting the issue to the voters.
Colorado Senate Bill 09-108, known as FASTER (Funding Advancements for Surface Transportation and Economic Recovery Act of 2009) has collected $1.4 Billion in “fees” over six years. The most recent State Auditors report found:
- Deficiencies in half of their processes for collecting the “fees.”
- CDOT (Colorado Department Of Transportation) also needs to improve its oversight and management.
- CDOT, Colorado Dept of Revenue, and Colorado Judicial all agreed with the recommendations presented.
More money + bigger government control = major problems.
The TABOR Foundation replied, “we told you so.”
It’s your taxes, oops we mean “fees,” that the government collects to fix Colorado’s roads and bridges.
Are they better now?
The quick summary is located on page 7 and shown below.
Read the audit report to decide for yourself.
Blake: Sabotaging TABOR comes down to a single subject
When it comes to sabotaging TABOR, term limits and the initiative process, the usual suspects tend to round themselves up.
The latest group, called “Building a Better Colorado,” is fronted by the otherwise estimable Dan Ritchie, who served 15 years as chancellor of the University of Denver, taking no pay and donating his $50 million ranch to the school.
The organization intends to hold “town hall meetings” throughout the state and produce a report recommending changes by year’s end.
Presumably most of these changes would necessitate ballot initiatives, since it’s hard to get the two-thirds majorities needed in the legislature to place referendums.
By proposing initiatives they are going to have to confront the awkward single-subject rule. More on that later.
Despite the clarity of their goals, the reformers like to talk in tiptoe-through-the-tulips terms. “It is subtle,” Gail Klapper of the Colorado Forum told The Denver Post, adding the discussions are about “nuanced changes” allowing Colorado “to move forward in the way we all want it to go.”
The Colorado Forum is just one of several civic groups behind Ritchie’s efforts. Its goals aren’t that subtle. It says on its Web site that “Colorado’s fiscal system has a structural imbalance — created by inherently conflicting constitutional mandates — that will continue to result in a widening gap between General Fund revenue and necessary expenditures.”
However “necessary” might be defined. The Forum goes on to recommend that TABOR-mandated refunds to the people be postponed and “revenue sources” not subject to the revenue cap be considered. Presumably that means imposing more “fees” instead of taxes that require a popular vote.
July 10, 2015 9:00 PM· By Peter Blake
Photo and copyright: Tony’s Takes
The courts keep knocking down TABOR-based lawsuits, but the tax law’s defenders keep coming back for more punishment.
Maybe they’ll win one someday. Hope can be found in a recent ruling in the TABOR Foundation’s lawsuit filed against the Colorado Bridge Enterprise in 2012, even though the foundation lost.
The CBE was established in 2009 by the General Assembly’s so-called “FASTER” Act as a “government-owned business” within the Colorado Department of Transportation. The additional bridge repairs were to be funded by increases averaging $41 in auto registration fees and much higher penalties for late payment.
The TABOR Foundation claimed they weren’t fees but taxes that voters weren’t given the opportunity to approve. What’s more, it said that the CBE didn’t qualify as a TABOR-exempt enterprise because it received more than 10 percent of its revenue from state grants.
The plaintiffs lost at the trial court, lost at the Colorado Court of Appeals and, the other day, the Colorado Supreme Court decided it wouldn’t even deign to review the case. Continue reading
Democrats want to get rid of the Taxpayer’s Bill of Rights.
How does TABOR protect your personal and business interests?
Is there a legal difference between a “tax” and a “fee”?
What difference does it make to your bottom line?
William Perry Pendley is president of Mountain States Legal Foundation (MSLF), which defends constitutional liberties and the rule of law. His book, Sagebrush Rebel, Reagan’s Battle with Environmental Extremists and Why It Matters Today continues to draw rave reviews.
MSLF filed four lawsuits in defense of the Taxpayer’s Bill of Rights (TABOR). One was rejected by the Colorado Supreme Court, but two remain alive, and another was filed just days ago. Two of the cases ask the Supreme Court of Colorado to rule on whether the words “tax” and “fee” have legal meanings, or can they be used interchangeably to collect revenue without the consent of voters?
You need not be a member to attend. Lunch is $25 for non-members, $20 for members and $10 for students. A portion of the lunch fee goes toward the CRBC Small Donor Committee or the CRBC Political Committee to support Republican candidates in the 2016 elections.
RSVP@smallbizgop.com (not required, but appreciated).
Colorado Republican Business Coalition Monthly Luncheon
Friday, July 17 from 11:30am – 1pm
Brooklyn’s at the Pepsi Center
941 Auraria Parkway, Denver
TABOR Committee members and TABOR friends,
We regret to inform you that the TABOR Foundation lost the Bridge Enterprise case.
The Court of Appeals concluded that the tax could still be designated a fee if it was likely the payer could use a bridge in the future. The only step left to us in the judicial system was for the Colorado Supreme Court to recognize the fallacy of that conclusion and overturn the Appellate Court. The Supreme Court selects the cases it will hear and yesterday declined to allow the case to proceed any further.
The TABOR Committee Board believed the case was eminently win-able. The state government’s scheme was so obviously a subterfuge to get around TABOR; the structure and premises so blatantly dishonest that we could not foresee any judge allowing it to proceed. The practical consequence of the loss is that the fiction will continue that you incur a toll when you cross a bridge and that you pay your tolls every year with your car registration tax. The “Bridge Enterprise” will continue to operate as if it were a business, but do so inside the Colorado Department of Transportation. It performs what is historically a government function, uses the Colorado Transportation Commission as its board of directors and the Department director as its executive director. It will mean that the made-up entity can continue to move government revenues off-budget and eventually place Colorado citizens in debt for about $1 billion off-budget, without prior voter approval. What a travesty. Continue reading