Carroll: Boulder’s “fee” could sink TABOR

Boulder is poised this year to test whether the Taxpayer’s Bill of Rights still has any meaning at the local level. Do voters get to rule on proposed tax hikes or not? Can local officials simply impose a new tax that roughly covers the cost of an existing service, or its improvement, and declare that tax a fee?

Remember, government can raise fees under TABOR without a popular vote. So Boulder is developing a “transportation maintenance fee” to pay for a shortfall in keeping up its streets. It “would be collected on utility bills like the stormwater management fee, “the Daily Camera reports,” and would raise between $2.5 million and $5.6 million.”

Although the city council has endorsed the concept, a final decision will not be made until officials conduct more public outreach and refine the details.

Now notice: Boulder residents would pay this “fee” whether they drive 50 miles every day on city streets in the largest Hummer ever built or never drive at all. The fee’s apologists retort that it would also maintain sidewalks and multi-use paths, but of course motor vehicles take a far higher toll on pavement than pedestrians and bicycles. And you could actually be homebound and still be subject to the fee.

A true fee pays for a specific service, and it should have some relationship to the amount of service used. Even the Colorado Supreme Court, which has done its best to pare away TABOR, takes the view that “If the … primary purpose for the charge is to finance a particular service utilized by those who must pay the charge[my emphasis], then the charge is a ‘fee.’ ”

The court wrote that in 2008. Unfortunately, in 1989, before TABOR was enacted, the court also ruled that a transportation utility “fee” in Fort Collins was “reasonably related to the expenses incurred by the city in carrying out its legitimate goal of maintaining an effective network of city streets” — and this of course is the precedent Boulder hangs its hat on.

The high court needs to get its stories straight. Either fees are paid by those who use the service or they are indistinguishable from earmarked general taxes — which seems to be Boulder’s position.

According to the Daily Camera, “city transportation officials said even people who walk or ride their bikes need good road infrastructure to support the overall economy, including getting goods to stores.” Well, our economy needs schools, too, but childless couples are never told they’re paying a “fee” to support public education. They’re told, correctly, they’re paying a tax.

Yet under the logic of the Fort Collins case, school taxes could just as easily be called fees, too.

Don’t just take my word for it. In 2005 the state Court of Appeals ruled 2 to 1 in favor of a Colorado Springs “service charge” for street lights, which had been financed by the general fund. As the dissenting judge noted, even residents with “no service from streets lights” were forced to pay. Some fee.

However, the majority opinion included a revealing admission. The judges acknowledged that “it could be argued that the [high court’s Fort Collins] analysis of special fees has led, and will lead, to almost any governmental service being structured as a fee, thereby escaping TABOR … .” Exactly.

But maybe some clarity is on the way. Mountain States Legal Foundation last year sued Aspen for imposing a tax on grocery bags and using the money to fund a variety of activities, while mislabeling the tax a fee. Telluride, Basalt, Carbondale and Boulder have defied TABOR with similar bag taxes. And while it will obviously take a while, the case eventually could land in the high court’s lap.

Let’s hope so. TABOR’s integrity at the local level clearly depends on the intervention of at least four justices who recognize a tax when they see one — because a growing number of local officials don’t.

E-mail Vincent Carroll at Follow him on Twitter@vcarrollDP

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