Some hard cash for state’s roads

It’s the kind of good news that only creates more problems: Colorado lawmakers this session will have a remarkable $1.7 billion more to spend than they did two years ago.

And so begins the intense lobbying from every special interest in the state, and resumes the partisan fight over how Colorado should fund transportation needs.

At the core of the debate is how much should come from the general fund, a limited pool of discretionary money that funds everything from schools and universities to the state patrol and health insurance for low-income residents. Democrats point to a $1.88 billion bond-like transportation bill last session that will be paid for using about $100 million a year from the general fund and say additional indebtedness will require a voter-approved tax increase so other areas of the budget don’t suffer in an economic downturn. Republicans hope to repeal that smaller measure and replace it with about $3.5 billion in bonds for transportation that would cost the general fund about $350 million a year for the next 20 years.

Fortunately, Gov. John Hickenlooper has a solution to this intractable debate that will appease the GOP push to finally do something about this state’s backlogged infrastructure program, while also protecting the general fund from being over-leveraged with debt.

The Democrat, serving his final year in office, is asking lawmakers to budget an additional $500 million to the Colorado Department of Transportation in the fiscal year 2018-19 budget and another $150 million in fiscal year 2019-20. That’s in addition to the upcoming general fund expenditures to fund the $1.88 billion in bonds that begins in 2020. We are encouraged that the Joint Budget Committee unanimously voted Wednesday to set aside that amount of money in the budget.

We know that still falls well short of what Colorado needs for infrastructure funding, but the approach would allow the state to move forward with important projects like widening Interstate 25 north of Denver and again between Colorado Springs and Castle Rock. Rural projects are on tap too, including redoing the U.S. 550 connection to U.S. 160 in Durango, and some is dedicated to transit programs.

How will CDOT fund what remains of a $9 billion backlog? That question will likely have to wait for another year, a new governor and a better sense of where the Colorado economy is headed.

Some of the additional revenue available is coming from federal changes to tax law in the GOP Tax Cuts and Jobs Act. While that bill will reduce federal income taxes for most Coloradans, it has the unintended consequence of increasing state taxes which are based on federal calculations.

At first that might sound like a new revenue source sustainable enough to carry billions in bonds, but the truth is that key provisions of the Tax Cuts and Jobs Act expire in coming years for individual income taxes, which will take away a good chunk of the Colorado increase.

There are other indications that the state should exercise caution and treat the 2019 windfall as one-time money rather than a recurring base.

And that note of caution applies to all kinds of expenditures Colorado lawmakers might be tempted to take up this year, not just transportation funding. Awarding tax cuts and tax credits that are difficult if not impossible to take away in a state that requires voter approval for tax policy changes would be a mistake. As would be giving in to too many special interest pleas for money.

We appreciate Hickenlooper’s moderate approach and hope it finds support this session.