The Bridge to Higher Taxes, More Debt

Posted by on May 24 2011 | Economics, Economy, Government Largess, Idiot Box (TV Show), PPC, TABOR, Taxes, Transportation

Since the moment it was passed, politicians have been trying to circumvent TABOR and its restrictions on taxes and debt. Sometimes their attempts fail, but sometimes they are wildly successful. Take for example the 2009 FASTER legislation. This bill created the Colorado Bridge Enterprise – a government owned business tasked with fixing and maintaining bridges within the state. If that sounds eerily familiar to what CDOT is supposed to do, it should. FASTER was a quick way to bypass the restrictions that CDOT would face in raising money to repair bridges. In other words, FASTER was a quick way to grab taxpayer money without asking us first.

How did FASTER manage to do that? Easy. It established a new tax, I mean “fee” in the form of higher vehicle registration costs for every single car registered in the state. It amounted to about $23 per car, per year totaling almost $100 million. The evidence that this “fee” increase is actually a tax is quite overwhelming. Which means that this tax increase is flagrantly unconstitutional. In just a couple of pages, Tom Ryan makes the case in this Independence Institute Issue Backgrounder, Colorado Bridge Enterprise: A Case Study in Contravening Colorado’s Constitution.

In addition to looting taxpayers to the tune of almost $100 million in new car registration “fees,” FASTER raised $300 million in debt – also without asking. It’s the old double end-around TABOR: raising unconstitutional taxes AND debt! As Richard Sokol tells it in this Issue Backgrounder, on December 1, 2010, the citizens of Colorado were put on the hook for $300 million dollars… and counting. FASTER was an attempt to repair and maintain Colorado bridges. The car registration tax increase was going to collect around $100 million. Evidently, $100 million was not enough. Richard Sokol explains,

…with a payment of $1.9 million to Wall Street-based bond dealers, the Colorado Bridge Enterprise issued $300 million of debt. Of this amount, $43 million matures in 2027, and $257 million matures in 2040. The interest rate on the debt is about 6.1 percent. The Enterprise will pay about two-thirds (4.0 percent) of the interest rate, and the federal government, through the taxpayer-funded Build America Bond subsidy, pays the rest. So, without a vote of the people, a CDOT Enterprise has issued $300 million in debt that will not be paid off for nearly 30 years.

Pretty slick huh? Loot current taxpayers to the tune of $100 million now and loot future taxpayers for at least $300 million later.

This deceptive story was too juicy to leave for just two Issue Backgrounders, so we had both Tom Ryan and Richard Sokol on my TV show Devils Advocate last week to share the awful details of this scam.

Let’s not forget that what FASTER did to taxpayers was soooo 2009. The hot new trend is to repeal TABOR through the courts. Why attempt to circumvent TABOR with accounting gimmicks and legal fictions when you can just rip it straight out of our state constitution? (Along with every other citizens initiative that was approved since the dawn of time). It’s a bit ironic that some of the same folks who love direct democracy when it comes to political elections, somehow disdain “direct democracy” when it comes to a citizen petitioning their government. David Harsanyi points out in The Blaze that proponents of repealing our electoral college because it’s just too damn representative, also favor getting rid of our initiative process because it’s just too damn… democratic? Huh? Rep. Andy Kerr might want to explain that one to us because I still don’t get it.

1 comment for now

One Response to “The Bridge to Higher Taxes, More Debt”

  1. Unfortunately, those Issue Backgrounders only covered about half the story (almost literally – the Bridge Enterprise is only one of two new “government owned businesses”, the other being the “Transportation Enterprise”, created within DOT by the FASTER legislation).

    Also (and most importantly), no mention of the role played by the Colorado Supreme Court in making FASTER possible.

    For the rest of the story, check out the real scoop:

    24 May 2011 at 5:00 pm

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