Aug 12, 2024
Spooky season isn’t for months, but one Colorado flight attendant recently got a jump scare anyway.
Holly Teska, a.k.a. @hollyintheclouds on TikTok, recently posted a one-minute video recounting her self-checkout nightmare at Target: an out-of-nowhere "public improvement fee" of 2.5% tacked on her bill. Per item, mind you. The dog treats. The pajama bottoms. Every. Single. Item.
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She shares a photo of her itemized receipt totaling $114.57. The math may sound easy as a 2.5% PIF should equal $2.86. But the PIF in turn gets hit by Colorado’s 2.9% sales tax, which gets mighty confusing unless you’re standing in line next to an accountant.
To coin a phrase, Teska sounds PIF’d off.
“Things are getting out of control right now,” she says. “I'm wondering, ‘Isn't that what sales tax is? ... “Target, Target, Target, I need answers!” In case Target CEO Brian Cornell didn’t hear it, she whispers it one last time in the video’s final second: "I need answers!"
Under normal circumstances, Teska would want to stake out the State Capitol in Denver. But she’d be looking in the wrong place. It turns out the PIF is a tax that isn’t really a tax — here’s more.
The PIF plot thickens
News of Teska’s TikTok caught the attention of Steve Staeger, a.k.a. Steve On Your Side, a consumer advocate reporter at Denver’s NBC affiliate, KUSA-TV Ch. 9. The 16-time Emmy winner set out on what he called an “undercover” investigation across the Denver area, buying 20-oz. bottles of Coke (subbed out for San Pellegrino mineral water at a local Whole Foods, natch).
It’s safe to assume he meant the word as a joke. But given the teeny 12-point type for “Public Improvement Fee” on the crinkly receipt, undercover may be an understatement. In fact, Staeger also called PIFs a “mystery.” At some stores, the PIF dipped down to 1.5%. Aren’t local fees supposed to be consistent?
His 9News story ran simultaneously on YouTube, where it racked up 1 million views in eight days. In it, he talks to Jeff Peshut, a real estate lawyer and assistant professor at the Metropolitan State University of Denver, who explains that property owners and developers impose PIFs to make physical improvements on their tangible assets. They may use them to pave the parking lot — or protect vehicles of another kind, as in financing arrangements, Peshut explains.
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And yes, it’s all legal. Colorado has had PIFs for more than two decades, with some arguing they make infrastructure improvements that keep malls and the like from descending into blight possible.
But name be damned, PIFs aren't the least bit public; the funds go into the pockets of developers. “It’s another financing vehicle,” said Peshut, who offers a more fitting label for the acronym: “privately imposed fee.” In the alphabet soup of land deals, he added that developers care most about using PIFs as OPM: other people’s money.
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Do PIFs exist elsewhere?
PIFs as described in this article are unique to the Centennial State; you won’t find them on the books anywhere else in America. There are some rough equivalents of public laws that protect private financial interests but those are more grounded in political intrigue.
In Chicago, a controversial 2008 deal ramrodded through city council by former mayor Richard M. Daley sold 36,000 parking meters to Morgan Stanley for more than $1 billion; today, public employees who write tickets are essentially paid to protect the pocketbooks of the private owners, now known as Chicago Parking Meters LLC. (Three years later, Daley took a job with the law firm that negotiated the deal.)
Back in Colorado, the folks who built and run the Lakewood Target that started the PIF kerfuffle may want to read the comments on Teska’s video: all 3,000-plus of them. Some suggested a store boycott, while others pointed out the insanity of piling a PIF on top of inflationary price hikes.
Then again, these captains of commerce may not give a hoot. But at least Teska has her answers now.
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Lou Carlozo is a freelance contributor to Moneywise.
