When Is a Fee a Tax?

Years ago, Oregon voters approved a ballot measure that required a vote of the people before any local increase in taxes or user fees. As the Antiplanner supports user fees as a way of improving government efficiency, I asked one of the measure’s authors why he included user fees in the measure. “You know if they were exempted that local governments would just claim every tax increase was a user fee.”

It seems to me that user fees can clearly be distinguished from taxes: fees go to the use for which they are paid while taxes go for other uses. That question might be settled by a recent lawsuit filed against the Metropolitan Washington Airport Authority, which is Dulles Toll Road in order to raise money to build the Silver Line extension of the Washington Metrorail system.

Continue reading