Court Opinion

ID: 9785890
Source: CourtListenerOpinion
Date Created: 2023-08-30 22:45:20.902038+00
Date Added: 2024-06-11T07:36:10.815575
License: Public Domain

Judge GRAHAM
dissenting.
I respectfully disagree that the charges imposed by the City of Colorado Springs for street lights and cable television services do not offend the limitations of TABOR, because I believe those charges are actually involuntary taxes. I do not read Bloom v. City of Fort Collins, 784 P.2d 304 (Colo.1989), so broadly as to permit the government to charge a fee for any governmental service so long as the fee “is reasonably related to the overall cost of the service,” as the majority states. I conclude that a fee must be charged for a service that is not ordinarily provided by governmental activity and must also relate to a service that directly benefits the user. Here, the economic realities of the City’s street light service and cable franchise fee indicate that the fees are actually taxes.
Based upon the analysis of special fees adopted by the majority, I believe that almost any governmental service could be structured as a fee and thereby escape the state Taxpayers’ Bill of Rights (TABOR), Colo. Const, art. X, § 20, and the city Taxpayers’ Bill of Rights (city TABOR), Colorado Springs City Charter 7-90.
Although no specific standard has been established to determine whether a particular charge amounts to a tax, the United States Supreme Court has always looked to “the real nature of the tax and its effect.” United States v. Allegheny County, 322 U.S. 174, 184, 64 S.Ct. 908, 914, 88 L.Ed. 1209 (1944). “The proper analysis to arrive at the real nature of the assessment is to examine ‘all the facts and circumstances ... and assess them on the basis of economic realities.’ ” United States v. City of Huntington, 999 F.2d 71, 73 (4th Cir.1993) (quoting United States v. City of Columbia, 914 F.2d 151, 154 (8th Cir.1990)).
The object of any tax is to provide revenue for the general expenses of government. See Cherry Hills Farms, Inc. v. City of Cherry Hills, 670 P.2d 779 (Colo.1983). Local government taxes have been classified by type as excise (taxing acts or events) or ad valo-rem (taxing property). Bloom v. City of Fort Collins, supra. Such taxes are distinguished from special assessments, which are based on the premise that a special benefit to property is conferred in an amount at least equal to the special assessment. Bloom v. City of Fort Collins, supra.
Assessments and taxes are distinguished from special fees because fees are not designed to raise revenues to defray the general expenses of government. Bloom recognizes that a special fee “might be subject to invalidation as a tax when the principal purpose of the fee is to raise revenues for general municipal purposes.” Bloom v. City of Fort Collins, supra, 784 P.2d at 308. Thus, a proper inquiry must look to the purpose served by the charge.
In assessing its purpose, we must ensure that the fee is directly tied to the service provided. Although mathematical exactitude is not required, there must be a reasonable relationship between the amount of the special fee and the cost of the service. W. Heights Land Corp. v. City of Fort Collins, 146 Colo. 464, 362 P.2d 155 (1961).
Applying the principles of Allegheny County, Western Heights Land Corp., and Bloom, I would conclude that the street light fee imposed here amounts to a tax.
First, historically, the street light service has been paid by the general fund. Thus, the City of Colorado Springs treated the service as a governmental one and paid for it with general tax revenues. The service was not proprietary, and it did not confer a special benefit to particular property for which a special fee could be charged or a special assessment made. See Okeson v. City of Seattle, 150 Wash.2d 540, 78 P.3d 1279 (2003). In Okeson, the Washington Supreme Court concluded that street light service charges were taxes and not fees because the service was of the type typically provided by government.
The majority distinguishes Okeson in two ways. It notes that the “ease interprets the Washington State Constitution and statutes, which contain provisions that differ from Colorado law.” It also disagrees with Okeson ⅛ use of the “proprietary versus governmental *1194function” analysis, which has been criticized by commentators.
Okeson’s analysis stands independent of its interpretation of Washington law because the court first determined whether the charge was a fee or a tax before it could apply that law — much the same as the majority does here to determine the applicability of TABOR and city TABOR. Furthermore, while the “proprietary versus governmental function” analysis may be simplistic, it has application here, where history shows conclusively that street lights are a governmental function directly tied to the general fund. Also, the majority inconsistently applies the analysis later in its opinion when it concludes the cable television charges are fees, citing Westrac, Inc. v. Walker Field, 812 P.2d 714 (Colo.App.1991), and stating that “charges for use of a public facility owned by a municipality are not ordinarily considered taxes because they are imposed only on those using the services provided to defray the expenses of operating or improving the facility.” The Westrac division used the governmental-proprietary distinction in concluding that the fee in question was not a tax.
Because defendant is acting in a proprietary, rather than in a governmental capacity, the adoption of a fee and charge structure for the privilege of non-aeronautical parties doing business at the airport is ... governed by the same rules and regulations that apply to a private land owner.
Westrac, supra, 812 P.2d at 716 (citation omitted). Thus, on the one hand, the majority dismisses the efficacy of the governmental-proprietary analysis and, on the other, justifies the distinction by citing a decision which recognizes and applies the analysis. Here, street lighting is governmental, not proprietary.
Second, I discern no reasonable relationship between the amount of the fee and the service rendered. The fee here is charged, in some instances, although the property owner has no service from street lights. The fee is also assessed at significantly higher rates on commercial property. Arguably, commercial property, often arrayed with building lights and parking lot lights, has less need for street lighting than individual residences. Yet commercial property pays higher fees for the same or, at some locations, no lighting. The fee here does not appear to be based upon use. The cases relied upon by the majority upheld a variety of fees, all of which have a nexus between the fee charged and the benefit conferred upon the user. That nexus is absent here.
In United States v. City of Huntington, supra, the court rejected a city’s attempt to charge for fire and police services under a special “municipal service fee.” These fees were charged on a square-footage method of assessment and were in response to a state constitutional limitation on ad valorem taxation. Here, the City’s removal of street lighting from its general fund occurred after the adoption of our state’s constitutional limitation on government growth (TABOR) and the City’s limitation on government growth (city TABOR).
Thus, it appears to me that under the holding of the majority, it will take nothing other than a pen and artful characterization to shift government services from tax based to fee based, thus eluding the will of the People as expressed in TABOR. “Under the theory advanced by the City, virtually all of what now are considered ‘taxes’ could be transmuted into ‘user fees’ by the simple expedient of dividing what are generally accepted as taxes into constituent parts, e.g., a ‘police fee.’ ” City of Huntington, supra, 999 F.2d at 74.
The cable television charges are also transparently disguised, pass-through taxes in my view. Although the City treated the charges on its own books as “taxes,” I do not consider this to be determinative of the issue. Instead, I look at the practical aspect of charging a fee to grant access to and to repair the public rights-of-way beneath which the fiber optic cable is installed. The streets and rights-of-way are constructed and maintained with general tax revenues. When they are torn up to allow for the installation of the franchisor’s cable, they are then repaved with special fees. These are taxes, collected by the cable company and paid by the consumer, to maintain public rights-of-way. Based upon the economic realities of the use *1195of the fees to repair and maintain public rights-of-way, I view the charge as a tax, passed through to the consumer. See United States v. City of Columbia, supra.
I would therefore reverse the decision of the trial court.