Constitutional Law, Grand Lake, TABOR, Taxes

Grand Lake evades TABOR with new tax badly disguised as a fee

The town of Grand Lake recently imposed a new charge to enhance the town’s taxes. In doing so, it broke faith with its citizens.

Laws are how the government tells the people how to behave (like, don’t drive 80 mph down a residential street). A town’s charter or a state constitution is how the people tell their government how to behave (like the town’s trustees must be elected). In Colorado’s constitution, the Taxpayer’s Bill of Rights — commonly known as TABOR — requires any government to obtain prior voter approval before it takes more taxes from individuals.

Grand Lake’s Trustees are no longer operating by the rules.

They expect you to conform to the laws but behave as if they can ignore the Colorado Constitution.

Their improbable interpretation is that their new charge is not a tax, but is instead a fee.

This, in spite of the fact that new revenue is deposited to the General Fund to cover expenses that are traditionally core functions of town governance, namely street lighting and safety. The Trustees must follow the rule that if the charge raises money for a public purpose and the charge is broadly based, it must be a tax.

If a charge enhancing General Fund collections can truly be termed a fee, then what would constitute a tax?

The Trustees falsely maintain that they can declare the charge is a fee, not a tax, as long as the “service is roughly proportional to the cost.” But every government program has a budget that can be apportioned to citizens as a “fee” in addition to the normal taxes. Moreover, that phrase pertains to limiting the amount of a fee; it doesn’t define a fee.

If the Grand Lake interpretation were to prevail, there will be an intolerable precedent set throughout Colorado, which is why this fiscal policy is gaining statewide concern.

The town has avoided the plain language of the Taxpayer’s Bill of Rights. Common sense tells us the charge is a tax. Grand Lake Trustees should reverse this unconstitutional ordinance and put any new tax to a vote at the next election.

Penn Pfiffner is a former state legislator and the Chairman of the TABOR Committee.


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