Disposable Bag Taxes (er, “fees”) violate Colorado Constitution

Municipal governments across Colorado, unable to shake their spending addiction, are increasingly resorting to constitutionally questionable schemes to raise revenues.

Following the state government’s lead – spearheaded by the Colorado Car Tax (er, ‘FASTER’ vehicle registration “fee”) increase passed in 2009 – the apparent favorite shenanigan used to separate you from your hard-earned dollars is the creative imposition of “fees” on a variety of activities falling under municipal jurisdiction (since raising taxes would require a pesky vote of the people, first, thanks to Colorado’s constitutional requirement under TABOR, the Taxpayer’s Bill of Rights).

A particularly egregious example of this municipal “fee” mania is the emerging trend (couched in politically-correct language about “saving the environment) of charging a tax (er, “fee”) on the use of disposable plastic shopping bags.  The municipal governments of Boulder, Aspen, and now Denver (BAD) are the most prominent practitioners of the BAD Bag Tax in the state (similar “fees” were also imposed by the towns of Basalt, Carbondale, Durango, and Telluride, among others; and similar bag “fees” are being pushed in Steamboat Springs, Frisco and Breckenridge).

The Town of Telluride was the first to exploit the “fee” loophole – passing a plastic bag ban and paper bag “fee” back in 2010:

Telluride banned plastic bags and imposed a 10-cent “Advanced Recovery Fee” on paper bags in 2010. Half of the money is retained by grocers to process the fee; the other goes to Telluride coffers. (Source: ‘Paper or Plastic’ Now a Legal Question, Colorado Observer 4 Sep 2012)

Aspen’s Bag Tax was the first to garner a legal challenge after its passage in October 2011 (entering effect in May 2012), with a lawsuit filed by the Colorado Union of Taxpayers (CUT) in August 2012 (“Lawsuit says Aspen’s bag fee is really a tax“).

The lawsuit (Colorado Union of Taxpayers Foundation v. City of Aspen) is currently pending the judge’s decision on plaintiff’s Motion for Summary Judgment (with the final round of responses and replies having concluded in May 2013).

The Boulder Bag Tax (er, “fee”) was passed by the Boulder City Council in November 2012 and became “law” in July of this year, despite the previous filing of a legal challenge in the Aspen case (which would likely void the Boulder ordinance as well).

Most recently (just last week) the Denver City Council has piled on with a Bag Tax (er, “fee”) proposal as well (“Denver’s proposed disposable bag ‘fee’ obviously a tax“).

The problem with each of these bag taxes (er, “fees”) is that they violate the clear constitutional prohibition on raising revenues by imposing “fees” – since, even under the notoriously expansive Barber v. Ritter ruling by the Mullarkey Court definition, only when

the primary purpose for the charge is to finance a particular service utilized by those who must pay the charge, then the charge is a “fee.” [Barber v. Ritter; emphasis added]

There is no “particular service utilized by those who must pay the charge” in any of the cases of the municipal “bag tax” ordinances – they are clearly intended as revenue-generating measures (albeit with a social behavior modification undertone) and thus constitute a “tax policy change directly causing a net tax revenue gain to any district” disallowed under the Colorado Constitution (Article X, Section 20) without prior approval by a vote of the people in the affected jurisdiction.

 

Read more about the Colorado Union of Taxpayers Foundation v. City of Aspen case in these documents:

Clear The Bench Colorado will, with your support, continue to promote transparency and accountability in the Colorado judiciary, informing the public to increase awareness of the substantial public policy implications of an unrestrained activism and political agendas in the courts.  We will continue to work to educate voters and provide information of relevance related to the judicial branch, and to provide useful and substantive evaluations of judicial performance.

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