The Colorado Supreme Court ruled against anti-tax advocates on Monday, saying that the city of Aspen’s 20-cent paper bag charge amounts to a fee and is therefore not subject to restrictions under the Taxpayer’s Bill of Rights.
The Aspen City Council passed the ordinance in 2011, which requires grocers to collect the fee and remit most of the revenue to the city. Those funds go toward waste management and recycling, and cannot be added to the city’s general fund. It was this detail that convinced a majority of the court’s justices to side with the city of Aspen.
“... it is plainly reasonable for Aspen to charge $0.20 per non-reusable bag to defray the costs of its waste-management scheme,” the court majority wrote. “Accordingly, this charge is not a tax. The primary purpose of the charge is not to raise revenue.”
The ruling turned aside a lawsuit filed by The Colorado Union of Taxpayers, an anti-tax advocacy group that was one of the original supporters of The Taxpayer’s Bill of Rights. Marty Neilson, the group's president, wrote in a tweet that the court's decision "continues to obliterate TABOR." "Alas, the justices deliver no justice!" she wrote.
TABOR, a constitutional amendment passed by voters in 1992, limits government's’ ability to raise taxes and retain revenue without voter approval. But because the amendment does not define what a tax is, government entities have had success in raising fees.
“... this deficiency has led to a significant weakening of TABOR,” wrote Rob Natelson, the author of a legal review of TABOR published by the libertarian Independence Institute in 2016.
In an amicus brief filed with the court prior to the ruling, the Colorado Municipal League, a lobbying group for the state’s towns and cities, warned that a ruling in favor of the anti-tax advocates would restrict municipalities’ abilities to “perform essential duties.”
“These new standards will invite chaos by requiring unattainable fee structures for municipal governments,” the brief read.
Three justices disagreed with the majority. In his dissent, Justice William W. Hood, III argued because the revenue generated by the fee would benefit the whole community and not just those who pay the fee, the charge amounts to a tax.
“Tempting though it may be to provide a reprieve to local governments seemingly hamstrung at times by the strictures of TABOR, that policy decision is not ours to make,” Hood wrote.
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