Colorado road funding effort clears Senate committee

January 30, 2018

Keith Goble

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A major initiative at the Colorado statehouse to help get transportation work done has taken its first step toward possible passage.

The GOP-controlled Senate Transportation Committee voted along party lines to advance the major transportation effort of the session. Sponsored by Republican Sens. Randy Baumgardner of Hot Sulphur Springs and John Cooke of Greeley, SB1 would divert state sales and use tax revenue from the state’s general fund to the state highway fund.

The money tapped would come via a predicted $1 billion surplus in new revenue for the fiscal year that begins July 1.

A ballot measure would also be referred to voters this fall. If approved by voters, the Colorado Department of Transportation would issue $3.5 billion in transportation revenue anticipation notes, or bonds, to cover work to address “critical priority transportation needs.”

According to a fiscal note attached to the bill, the bonds would have a maximum repayment cost of $5 billion over 20 years.

Advocates say the bill would help the state address a $9 billion road maintenance backlog without a tax increase.

Specifically, SB1 calls for diverting 10 percent of existing sales tax revenue – about $350 million – from the general fund to transportation.

“This year, for the first time in recent memory, we have the additional funding we need to jump-start work on our massive road maintenance backlog, without the need to ask voters for a tax hike,” Baumgardner said in a news release.

Gov. John Hickenlooper has indicated support for a tax increase to help cover transportation work. The Democratic governor said he wants to let voters decide whether the state should raise new revenue for transportation.

Democrats say SB1 provides only a part-time fix. They add that the money would be pulled away from education and other programs.

Supporters insist other agencies also will benefit from the surplus.

Cooke told the committee that the state cannot afford to wait any longer to get a deal done.

“Without action now, the $9 billion road maintenance backlog will continue to grow, putting us even further behind the eight ball,” Cooke said.

Opponents acknowledge that transportation funding is important, but they say other state agencies are also important. Democrats have instead called for a sales tax increase to address the state’s backlog for transportation work.

The bill’s next stop is the Senate Finance Committee. If approved by the full Senate, SB1 would head to the Democrat-led House.

Long-term options
Three-quarters of Colorado’s road construction and repair budget comes from the federal government. At the state level funds come via fuel taxes, vehicle fees, and toll lanes. General funds and bonds can also be tapped to pay for infrastructure work.

Despite the multiple funding sources now in place, the Colorado Department of Transportation estimates a $10 billion shortfall over the next decade. The agency attributes the budget gap to a decline in fuel taxes.

Colorado now charges a 22-cent excise tax on gas and a 20.5-cent tax on diesel. The tax rates have been the same since 1991.

To view other legislative activities of interest for Colorado, click here.

Lucas Oil

Keith Goble has been covering trucking-related laws since 2000. His daily web reports, radio news and “OOIDA’s State Watch” in Land Line Magazine are the industry’s premier sources for information regarding state legislative affairs.