(You can listen to this column, read by the author, here.)
It’s hard to believe that it’s been a year and a month since the Marshall fire swept through my neighbors in Superior and Lafayette. Wasn’t much longer back in time it happened to folks near Colorado Springs.
After the Marshall rire I saw police stationed outside the affected neighborhoods and barricades put up to keep looters and thieves from stealing from victims who already lost so much.
So just how repugnant is it that it turns out it’s the Colorado state government and, by default, our dear friends at the Regional Transportation District (RTD) pilfering from these poor fire victims to the tune of around $10,000 per homeowner.
Here’s how the crime works. Every time we buy stuff, we pay sales and use tax on it. The state charges 2.9% on most everything we buy.
If you live in the Denver Metro area, you get the extra delight of paying another 1% to one of the most bloated, inefficient transit agencies in the country, RTD. (Thus the reason our traffic is so awful, our taxing capacity for transportation doesn’t go to roads, but mostly to trains, trolleys, and buses that the Census Bureau says carries a measly 4% of our trips.)
The rest of the sales and use taxes we pay are gobbled up by counties, cities, special districts and the like.
So, when a new home goes up everything purchased to build that house is subject to sales and use taxes. Say someone builds a house in the mountain town of Allenspark. For everything they buy to build it they give a 1% hostage fee to RTD, even though RTD gives absolutely no service to their community. I believe the term is “paying tribute to the emperor.”
Okay, that was just a gratuitous slap at RTD. Let’s say someone builds their home in Superior. They pay 1% tribute to RTD (for their FasTraks train to Boulder that was to be completed by 2017 but has never even been started AND the Personal Rapid Transit rail system that was to be completed by 1980 but never started), 2.9% to the state, 3.46% to Superior, 0.985% to Boulder County, and so on.
Now, you pay all those sales taxes every time you buy a cup of coffee as well, but thankfully you only build your house once.
Well, most folks only build their house once. Some lucky bastards, like those around Superior and Colorado Springs recently, get to build it two times!
Under the label, “let growth pay its own way,” sales and use tax on new building makes sense. But replacing the burned down building just brings back what was there before. It’s not growth. It’s not new. There’s no extra burden to any of these governments.
The cities, counties, RTD, the state, etc., didn’t even budget for all this extra money to flood into their coffers. If not for the fires, the extra dough wouldn’t have appeared. As far as the governments are concerned, it’s winning the lotto, manna from heaven. One family’s tragedy is their windfall.
Some local governments, like Superior, understood this and waived their sales and use tax for homes being rebuilt after the fire. Even the remarkably greedy county of Boulder cut it for the victims, understanding it didn’t really cost them anything.
Governor Jared Polis pledged to do all he could to help fire victims. So last legislative session Senate Bill 206, which dealt with disaster recovery, lifted the state and RTD sales and use taxes for those re-building from natural disasters. Awesome.
Well, awesome until that language was mysteriously ripped out of the bill just before it passed and signed into law.
Now the state of Colorado will get a nice little cash windfall it didn’t expect of about $9 million on the backs of fire victims who can’t afford to rebuild their homes and their lives. RTD is set to pocket $3 million.
The supermajority of Democrats in the legislature have an opportunity to prove they have a modicum of human decency and ethics by not double taxing victims of natural disaster. Let’s see if they fix their malfeasance this session.
Polis has signaled he’ll sign such a fix. Right on.
Legislature, what kind of looters steal from those in their time of need?
Jon Caldara is president of the Independence Institute, a free market think tank in Denver.
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