Last week it was announced that Mountain States Legal Foundation has sued two Colorado groups and their officers for violating the Taxpayer’s Bill of Rights (TABOR) of the Colorado Constitution. The suit is on behalf of the TABOR Foundation against the Colorado Transportation Commission (CTC) and its members. This commission oversees both the Colorado Department of Transportation (CDOT) and the Colorado Bridge Enterprise (CBE). The TABOR Foundation contends that its members should have been allowed to vote on $100 million in new taxes and $300 million in new Colorado bond issues imposed on Colorado citizens by CBE.
Many Coloradans are probably asking, “How did we get here?” I have been following this issue over the last year and here is what I have found.
Each year CDOT is required to conduct a survey of all roads and bridges in Colorado and report the results to the Colorado legislature. In the late 90′s till the mid 00′s the legislature’s response seems to have been, “We don’t have any money this year, maybe next year.” In 2007, a major bridge collapsed in Minneapolis, MN and most state DOT’s conducted intensive surveys of their road and bridge infrastructure. In 2008, CDOT advised the legislature that it would take approximately $1 billion to repair the state’s roads and bridges. However, 2008 was an election year. The Colorado Constitution, due to TABOR, mandates that any increase of taxes is subject to a vote of the citizens and Coloradans were in no mood to raise taxes given the economic state of the economy. The legislature knew that there would be severe electoral consequences if they attempted to raise taxes to repair what they had neglected for more than a decade. CDOT received no additional funding in 2008.
During the legislative off-season state legislators concocted a funding scheme named Funding Alternatives for Surface Transportation and Economic Recovery (FASTER). As usual the initial mode of funding was not to cut expenditures, but raise taxes. Again, TABOR raised its ugly (at least from the government’s point of view) head. Taxpayers would have to approve a hefty tax increase and that was not likely to happen. However, TABOR allowed the formation of “government operated enterprises.” (GOE) So began the typical government solution, end run the Constitution by changing definitions.
There were approximately 125 Colorado bridges needing repair or replacement. Under SB 09-108 the Colorado Bridge Enterprise (CBE) must have assets and must be 90% self-supporting. FASTER implemented a “fee schedule” consisting of a Bridge Safety Fee and a Road Safety Fee for registering vehicles rather than taxes. Additional funds were raised by a $2 per day car rental “fee.” No tax, no vote of the people. Since all revenues raised by the new fees went to CBE (approximately $100 million per year) it was now at least 90% self-supporting. In order for it to have assets CDOT transferred ownership of 77 of the deficient bridges to CBE. Two bridges had a combined value of approximately $1.4 million. The other 75 were declared to have no value to the state.
Now with assets and income CBE issued $300 million in bonds and is likely to issue at least another $400 million in the near future. Colorado taxpayers are obligated for the repayment of these bonds. Like the federal government, Colorado government intends to let our children and grandchildren pay for our repairs and theirs. The bulk of the initial issue is not scheduled to be redeemed till 2040. Just in time for my grandchildren to enter the workforce.
One issue with the CBE scheme is that the 11 member board of CBE consists of the same 11 people on the Colorado Transportation Commission (CTC). Their jobs on CTC correspond with their jobs on CBE. Is CBE really a GOE or is it simply an extension of the CTC?
However, the main issue and the one at the heart of the new lawsuit is the difference between fees and taxes. In 1992 the Colorado legislature include a five part definition of “fees.” Three of the parts were:
1.) A fee defrays the direct cost of a service
2.) Must be reasonably fore-go-able (not mandatory)
3.) Related to a specific service
If the FASTER fees were actually fees, a way to collect the fee from anyone using the affected bridge would have to be implemented and anyone actually using that bridge (state resident or not) would be charged the fee. Currently nonresidents are not charged unless they rent a vehicle in the state or choose to register a vehicle in the state.
Around the time of the enactment of FASTER, former Chief Justice Mullarkey’s State Supreme Court overturned that definition and implemented a 2 part definition. The two parts are:
1.) Did the legislature call it a fee?
2.) Was there a stated purpose for the fee?
If this definition is allowed to stand, then the Colorado legislature will never again enact a tax. They will simply designate every revenue increase as fee and TABOR will cease to exist. Colorado taxpayers will no longer be able to keep their government in check.
Let’s follow the TABOR Foundation’s lawsuit closely and the courts can see the difference between a tax and a fee. If so, the government of Colorado will remain a government of the people, by the people and for the people. If not, remember the 12th and 13th rules of the USMC Rules for Gunfighting…
12.) Have a plan
13.) Have a back-up plan, because the first one won’t work
Let’s work on that plan, just in case.
By: Alan Stump
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