Constitutionality of Grand Lake fee questioned by TABOR Committee
February 8, 2018
A furor was stirred up in Grand Lake earlier this year after town officials announced the implementation of a new municipal fee, and now one state advocacy group is calling into question the fee’s legitimacy.
In late January, the Tax Payer’s Bill of Rights Committee, or TABOR, the advocacy arm of the independent TABOR Foundation, issued a letter to Grand Lake’s town government, contesting the legal basis for the recently adopted fee, which imposes an additional $100 charge on each water tap within the community. The charge has been earmarked to pay for law enforcement and emergency dispatch services as well as street lighting.
“New receipts are to be deposited to the general fund and are intended to cover expenses that are traditionally core functions of town governance, namely street lighting and safety,” read the letter from the TABOR Committee. “Although the Colorado Constitution clearly calls for citizens to vote on all new taxes, you are trying to avoid the plain language of the Taxpayer’s Bill of Rights by identifying the new tax as a ‘fee.'”
The letter went on to assert Grand Lake is “not operating by the rules” and that the action by the local government “violates the Colorado Constitution.”
While the letter itself does not outline a specific legal argument as to why the implementation of the fee is unconstitutional, an official from the TABOR Committee explained to Sky-Hi News in a follow-up interview.
Penn Pfiffner, chairman of the TABOR Board of Directors, which includes both the TABOR Committee and TABOR Foundation, said the charge imposed by the town qualifies as a tax and not a fee.
“The fact that it is broadly based and goes to a core function of government, we know it is a tax,” Pfiffner asserted. “The more broadly based a charge is the more likely it is a tax.”
Legal arguments put forth by Grand Lake Town Attorney Scott Krob during a board meeting last month noted there were restrictions and stipulations under which fees can be implemented by local governments, though, according to Krob, the new municipal fee is within the legal purview of the town.
“A fee has to reflect the cost of the service being provided,” Krob said. “Water fees, for example, cannot be set arbitrarily. The board cannot set a fee unless it can point to a specific service they are providing and equate the amount of the fee to the value of the service.”
According to Krob, there are no restrictions regarding town provided services that can be paid for via fees and the historic payment method for a given service — whether the service was previously paid for via fees or taxes — does not impact the legality of implementing fees.
“The inherent limit is the cost of providing that service,” Krob said.
Representatives from the TABOR Foundation, the advocacy arm of the organization, said they are not currently planning to take legal action against the town, but they have spoken with legal counsel about the potential for legal action.
“We would prefer things get resolved without any legal involvement,” Pfiffner said. “I think this can be resolved.”
Pfiffner said he hoped the town will take the newly imposed charge to a vote of the local citizens.