Read Part One
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: