COLORADO: When Is a Fee Not a Fee?

A month ago, I commented on Colorado Senate Bill 213, which would allow the state to give major cities housing targets that they would have to meet and require cities to rezone single-family neighborhoods to allow for more density. Some of the worst features of the bill have been deleted, but the bill is still bad.

The reason why the rezoning requirement was dropped from the bill was that the cities themselves opposed it — not because they opposed density but because they said they were already imposing density on their residents and didn’t need to be told to do so by the state. Many cities in the Denver metro area are landlocked, so the only way for them to meet state housing targets would be to densify anyway.

The bill also includes more funding for “affordable housing.” Some of that funding is supposed to come from a “fee” on new housing, thus making that housing (and all housing that competes with it) more expensive. But how is this a fee and not a tax?

Under Colorado’s Taxpayer Bill of Rights (TABOR), a constitutional amendment, the state can’t increase taxes without voter approval. But it can increase fees, so the legislature is redefining many taxes as fees so they can raise them without having to go to the voters.

At the start of the year, Denver imposed a statewide “fee” of 10 cents per shopping bag you didn’t bring yourself. That’s clearly a tax on shopping bags, and not a fee you’d pay in exchange for something like access to a state park. But at the rate Colorado is going, I wouldn’t be surprised if, in a few years, Democrats were imposing “fees” on pretty much everything.