May 2, 2024 - Politics

Colorado lawmakers want new fees on rental cars, telephones, tires and alcohol

Illustration of a super long price tag.

Illustration: Aïda Amer/Axios

It's going to cost more to live and work in Colorado once Democratic lawmakers finish their work at the Capitol this session.

State of play: The majority party is advancing legislation to increase fees on alcohol sales, rental cars, oil production, telephones and the purchase of tires — all to pay for various new programs that didn't fit into the $41 billion state budget.

Why it matters: Given their breadth, just about everyone will feel the impact of the new fees at a time when the cost of living in Colorado is rising.

The intrigue: Democrats wanted to go even further and impose new fees on vehicle registrations and EV charging, but both measures failed to gain enough support.

What they're saying: "It's our responsibility to ensure that the right users are paying their fair share, to make sure that we're not having a burden on some unfairly. I do think we're finding a balance," Senate President Steve Fenberg (D-Boulder) told Axios.

Between the lines: Democratic leaders are increasingly relying on new fees to pay for their priorities because the Taxpayer's Bill of Rights caps state spending. Also, fees — unlike new taxes — don't need voter approval if they collect less than $100 million combined in the first five years.

The other side: Republican lawmakers objected to the new fees and questioned their legality in some cases. "If it's a good public policy, we should call it a tax," Senate Republican leader Paul Lundeen of Monument argued in a legislative debate Tuesday.

  • Sen. Jim Smallwood (R-Parker) suggested that Democrats are manufacturing a "Rube Goldberg machine to get money."

Zoom in: Not all the fees are charged to consumers but the costs are expected to trickle down, or weigh heavier on businesses.

Here's a look at the size of the new fees and what they will pay for.

  • Alcohol sales: The fee charged to large distributors of beer, wine and liquor and is expected to collect about $20 million. The money will mostly go toward alcohol treatment and recovery programs.
  • Rental cars: Dubbed a congestion impact fee, it will apply to short-term vehicle rentals and cost up to $3 a day. The money will go toward operating new passenger rail service and other transportation projects.
  • Tires: The current 55-cent surcharge on the purchase of tires is being replaced with two new fees that roughly total $3.75 for each. It is expected to collect about $20 million a year to clean up tire waste.
  • Telephones: In addition to current surcharges, this new fee on telephone users, estimated at 12 cents a year, will collect about $700,000 to pay for training programs for 911 center responders.

What's next: The bills must receive final approval by the Legislature's May 8 adjournment date.


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