Originally published on Forbes.com.
Reusable grocery bags are a thing in my house. That is the result of my covivant who keeps us on a vegetarian diet and has an elaborate shopping routine that involves at least three stores. When I go with, she usually lets me stay in the Barnes and Noble with the free wi-fi and work on my blog, which is really nice. Well not everybody has a Peace Corps veteran, former member of a spiritual community, who went to Woodstock, guardian keeping them environmentally responsible . That is probably why the City of Aspen added a “waste reduction” section to its Code. No more paper or plastic. Plastic is entirely banned and if you want paper you have to pay $0.20 per bag as a “waste reduction fee”.
That wouldn’t trouble my covivant who has quite a collection of reusable bags, but it bothered the folks at the Colorado Union of Taxpayers (CUT). They think the “waste reduction fee” is really a tax. Since it was not approved by the voters, that would mean that it violates the Colorado Taxpayer Bill of Rights (TABOR). Well CUT got bad news this month, as the Colorado Court of Appeals upheld a district court decision sustaining the “waste reduction fee”.
Fee Versus Tax
To determine whether a “financial imposition” is a tax or a fee, the court looks at the dominant purpose at the time of enactment. If multiple interpretations are possible, the court picks the one that will create the greatest restraint on the growth of government. The court considers
(1) The language of the enabling statute and whether it indicates that the primary purpose is to raise revenue for general spending or to finance a particular purpose.
(2) The primary or principal purpose for which the money is raised, not the manner in which it is ultimately spent.
(3) Whether the primary purpose of the charge is to finance or defray the cost of services provided to those who must pay it.
Reduce Waste
The primary purpose of the “waste reduction fee” was to reduce waste. The top priority for the use of the funds collected was to provide reusable bags.
The ordinance clearly expresses an intent that the waste reduction fees remitted to the City be used for several other functions reducing the cost to the City of litter cleanup and waste disposal, including education regarding trash and waste management, the funding of programs and the presentation of community events regarding trash and waste management, and outreach through the use of a website to educate the public about these topics.
Thus, we conclude that the City intended the charge to finance a particular class of services related to the reduction of trash and waste and to fund education about those matters.
Surplus revenue, of which there has been none, will be held in a special fund not released to the City’s general fund.
The court also found that people paying the fee received benefits such as reusable bags, availability of recycling containers, waste receptacles, trash cleanup events and various waste reduction and recycling educational services.
Restraining Government Growth
The court did not find that the Foundation’s interpretation of the ordinance would necessarily restrain the growth of government, since the ordinance might well reduce the need for government employees to be out picking up trash.
Other Coverage
Most of the coverage that I have found has been local. Peter Blake in a piece titled A bad week for TABOR reports that William Perry Pendley of CUT indicates that an appeal of the ruling is likely.
“We believe that the focus of the panel was properly on the beneficiary of the assessment, which is Aspen and not the grocery shopper; thus the levy is a tax, not a fee,” said William Perry Pendley of the Mountain States Legal Foundation, which represented CUT.
Pendley said he was disappointed in the Aspen decision “but we have long known it will take a ruling of the Colorado Supreme Court to properly affirm TABOR’s full intent.
Rick Carroll in Aspen bag fee survives another legal challenge indicates that the City kept legal fees to a minimum by not farming out representation.