Transportation funding in Colorado has been a problem for, like, ever. Typically, capital spending is funded by what’s left over after the general fund expenses have been taken care of, but in recent years, to quote Geoffrey Rush from Shakespeare In Love, “There’s never any profits.” Which means that highway maintenance has been suffering. In 2005, the voters adopted Referendum C, but rejected Referendum D, which would have put a substantial pot of money at the disposal of the government for unspecified road projects.
So in 2009, the legislature passed FASTER. FASTER did a number of things, but primarily is raised vehicle fees in order to pay for bridge repair. Much of the debate at the time centered around the claim that fees are not taxes, and that this was simply a re-interpretation to get around TABOR’s requirement that tax increases be subject to a vote of the people.
The reality is a little more subtle than that, and it shows that when the state is bound and determined to get its hands on your money, there are almost no lengths to which it will not go, no manipulations in which it will not engage. (Just consider Obamacare’s fluctuating claims that the money you’ll have to pay is either a tax or a penalty, depending on the legal theory it happens to be operating under at the time.)
In fact, what the state did was to create a TABOR Enterprise, the Colorado Bridge Enterprise, which is exempt from a number of TABOR restrictions. It can, for instance, issue revenue bonds. Enterprises can also raise their fees-for-service without TABOR limits, but they can’t collect generalized taxes. They also must get less than 10% of their annual revenue from the state. This is how, for instance, the University of Colorado can continue to raise tuition year after year. So while the argument rested on a fee not being a tax, that was mostly because Enterprises can only collect fees, not taxes, and it was essential that the bridges be transferred to the Enterprise.
That 10% revenue limitation was also a problem, since in the first year, the bridges themselves would be the bulk of the Enterprise’s income. So the state depreciated all the bridges to $0. No salvage value, no remaining years of useful life, nothing. A claim that’s risible on the face of it, one that would get a private company and its auditors clapped in irons, but a dodge that the state felt perfectly comfortable resorting to.
The other details are equally unsavory. While the assets are supposed to be owned by the state, there is supposed to be an arms-length relationship between the state and the Enterprise. The members of the Enterprise Board are the members of the Colorado Transportation Commission. The fee itself is collected not by the Colorado Bridge Enterprise, but by the state Department of Revenue, which charges no fee for this service. And the revenue bonds are the Stimulus’s Build America Bonds, whose interest is subsidized by you, the federal taxpayer.
The difficulty is that since the Enterprise owns only bridges, the only fee that it can reasonably assess is for the use of those bridges. But since it’s not a toll, out-of-staters, and most trucks don’t pay the fee. And the fee is assessed as part of the vehicle registration, whether or not your vehicle is road-worthy and anywhere near any of the bridges in question. Suddenly this fee begins to look an awful lot like a tax, or at least a fee that the Bridge Enterprise doesn’t have the power to collect, since it’s not on bridge use, but on auto use.
That’s the basis for the lawsuit against FASTER. The plaintiffs are rural farmers who have vehicles that don’t go far from home, or even off the farm, and yet are charged a usage “fee” for a bridge they can’t even see, never mind drive over.
“How many legs does Cobalt have, if you call the tail a leg?”
“Four. Doesn’t matter what you call the tail, it’s not a leg.”
There’s a legitimate discussion to be had – and a vast literature – about the best way to fund roads. They do constitute a “system” from which all of us benefit. They’re the paradigm of platforms that government ought to be building, rather than products that try to dictate end results. As Rep. McNulty pointed out in the debate, roads lower the cost of commerce for everyone, save lives, and enhance freedom. To that extent, general fund money, or a vehicle fee, a gas tax, a mileage fee, a usage fee, a toll, or peak usage tolling – in order of increasing specificity – are all reasonable means. The economic effects of each are different, and they each make sense for different kinds of roads.
If the legislature had gone to the people and asked them for $31 a year, hell, even index it for inflation, in order to repair bridges that could become homicidal, they might well have voted for it. (Although the 2004 incident resulted from workers’ error, not the age of the bridge).
What’s clearly unfair is to creatively interpret the rules in order not to have to ask.