Another Ritter end-run around taxpayers

by | Feb 4, 2008 | Capitol Review, Notes

Republicans wouldn’t have dreamed of this storyline, but for the second time in less than a year, Democrat Gov. Bill Ritter is proposing a major tax increase.

And just like last time, he doesn’t want to let you vote on it.

Taxpayers who have just received their property tax bill could be forgiven for mistaking last year’s tax "freeze" for a tax hike. After all, when the legislature and the governor pass a new law that causes you to pay more than you would have otherwise, most people understandably think their taxes have been raised.

But since your taxes were "frozen," you don’t get to vote – even though the Taxpayers Bill of Rights in the state constitution says you should. (If only you had a law degree or a union membership, it would all make perfect sense.)

Now the governor wants to pull a similar legal slight of hand on the cost of renewing license plates on your vehicle.

Ritter’s latest plan, cooked up by another of those infamous blue ribbon commissions, is to raise the cost of licensing your vehicles by an average $100 per vehicle per year to raise money for highways.

This would generate about $500 million a year, which sounds like a mighty hefty tax increase. Except that it’s called a "fee," not a "tax." Colorado has no Feepayers Bill of Rights, so when lawmakers raise "fees," you don’t get to vote.

How subtle is this distinction? It’s merely a matter of accounting. Your vehicle registration receipt shows the vehicle’s ownership tax and license fee side-by-side.

If the governor wanted to raise the ownership tax by $100, he would need you to approve it at the next election. But if he can get the legislature to raise the license fee, maybe you will forget about it by the next election.

Fat chance, since you will remember each time you renew the license plates on every vehicle you own.

Even the Governor’s Blue Ribbon Panel on Transportation recognized that smacking taxpayers with a $100-per-vehicle increase without a vote would be playing with fire.

In November, the commission noted that "the legislature can pass an increase without voter approval. However, referral of the fee to the voters may be more acceptable to the public." Unfortunately, that word of caution is mysteriously absent from the final report.

What’s also subtle — and downright underhanded — is the legislature’s habit of raiding existing highway funds (more than $40 million last year alone) to spend on other pet projects.

Ritter could have protected transportation funding by vetoing those bills, but he didn’t. Before taking more money from Colorado drivers, he should demonstrate his commitment by restoring those funds and stopping future raids.

Certainly, a case can be made that funding for the state’s transportation system is lagging. Fuel tax revenues don’t begin to keep up with inflation because gas and diesel are taxed at a fixed amount per gallon (22 and 20.5 cents, respectively) rather than a percentage of the price.

At $1.062 billion, the transportation budget is at its highest level since 2001-02 when it was bolstered by much lower gas prices and proceeds from Gov. Bill Owens’ TRANS bonds which voters approved in 1999.

Since then, gas prices have increased and so have fuel efficiencies and the use of hybrids and alternative fuels, all of which keep fuel consumption relatively flat. Meanwhile, population and miles driven have increased substantially.

The vehicle fee increase would boost transportation funding by about 50 percent, but the blue ribbon commission is backing a much bigger package that would raise more than $1.5 billion a year in from taxes and fees. Also on their wish list are increases in fuel taxes (13 cents a gallon), sales taxes, oil and gas production taxes, and hotel and car rental fees.

"We probably haven’t made the case yet to get that on the 2008 ballot," Ritter recently told state legislators.

Definitely not, and if the governor thinks that case will be stronger after drivers are smacked with a $100-a-vehicle "fee" increase, he is in for a big surprise.

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