Colorado’s stalemate over transportation
Dislike of taxes, divided politics have left state far behind others
Years of bright ideas and ambitious proposals to tackle Colorado’s multibillion-dollar transportation shortfall have crumbled like so much of its highway pavement — with success eluding politicians and civic leaders at a frequency unmatched in most states.
Many of the darkest-blue and the reddest of red states in recent years raised serious amounts of money without so much fuss. Massachusetts last month approved a gargantuan $16.5 billion bond package of major road, bridge and transit upgrades and expansions. Utah has acted more incrementally, chipping away at its transportation project backlog by increasing its gas tax, hiking an electric vehicle registration fee and making other money-raising moves to bolster its system for the long term.
Thirty other states also have raised their gas tax in an eight-year blitz that stretched
from California to Alabama to Virginia, according to the National Conference of State Legislatures.
But not Colorado. When it comes to transportation, the state’s rare combination of tricky tax policy, stagnant revenue sources, regional rivalries and standoff-prone politics has proved difficult to navigate, keeping Colorado from fixing its crumbling transportation system in a sustainable way.
“We have to do three times as much work to get the same results as other states,” said Rep. Matt Gray, a Broomfield Democrat who leads the House transportation committee.
The result is recurring frustration felt by drivers stuck in traffic and those looking for more transportation options in a state whose population has grown 70% in the past three decades, to 5.8 million. Colorado has added little capacity on state roads in that time and still relies heavily on a gas tax that hasn’t changed from 22 cents per gallon since 1991; despite all the population growth, that tax actually raises slightly less, after collections are adjusted for inflation, than it did in the early 1990s.
As state lawmakers prepare their latest salvo — a package of transportation-centric fees that likely will include one to supplement the gas tax — the stakes have ratcheted only higher.
Democratic state leaders have laid out ambitious transportation policy goals that increasingly look beyond traffic-choked highways to address climate change. Doing so will require accelerating the adoption of electric vehicles and shifting more travel from highways to less-polluting alternatives, such as cycling and transit.
Colorado’s most unique challenge has been its stringent Taxpayer’s Bill of Rights, popularly known as TABOR, a constitutional amendment initiated by a colorful conservative activist and passed by the state’s voters in 1992. It requires a vote of the people to create or raise any tax and places other fiscal constraints on government.
That has served, depending on
one’s viewpoint, as either a roadblock to good governance or a welcome hindrance that saves taxpayers money.
In the face of voters’ rejection of a trio of money-raising ballot proposals in 2018 and 2019, including what would have been a large dedicated sales tax for transportation initiatives, the state’s elected officials have managed only a piecemeal approach in recent years. Their moves included limited budget transfers and smaller-scale borrowing, bowing in bipartisan compromises to Republicans’ preference for stretching Colorado’s existing resources further, instead of raising more money.
Each time, they’ve left a sizable future challenge — a recurring shortfall, once estimated at nearly $1 billion a year, to upgrade and expand the state transportation system — for another day. In the shorter term, the Colorado Department of Transportation has a 10-year, $5 billion priority list of projects that’s only about one-third funded.
“At the end of the day, there are different ideas about how you go about funding” transportation, said Sandra Solin, a longtime lobbyist for Fix Colorado Roads, a coalition of business groups around the state that has
pushed for more highway improvements. “And when you have TABOR in the mix, with the requirement to go to voters … it just ends up in a stalemate. That’s what we’ve experienced whenever we’ve talked about new funding sources.”
Democrats, now in control of both chambers and the governor’s office, are optimistic the fee package being put together by Gray and Sen. Faith Winter, that chamber’s transportation chair, has a clearer path to success than past efforts.
Details about the fees and proposed charges are expected to be released in coming weeks, but the goal is eventually to raise hundreds of millions of dollars a year via new fees and, to a lesser extent, recurring transfers from the state’s approximately $13 billion general fund budget. The money would go to CDOT’s plans, to transit and multimodal projects across the state, and to more public charging infrastructure for electric vehicles.
Winter and Gray have talked about the potential to assess new or higher fees in some way on gas purchases — alongside the tax — and on electric vehicles (which already net an extra $50 annual fee), the trucking industry, package deliveries, Uber and Lyft
rides, and other services that make use of roads.
Over time, the new fees would offset the sputtering gas tax as it’s affected not only by inflation but also continuing gains in fuel efficiency and the increasing adoption of electric vehicles.
Gov. Jared Polis said he liked the approach and was eager to see their fleshed-out plans.
“The way that we’ve set up to fund our roads certainly doesn’t work with those trends,” Polis said. “So we’ve got to modernize that — we’ve got to figure out how to fund our roads in five years and 10 years. It’s a big danger to the state if the state doesn’t address this.”
In the meantime, he has pushed lawmakers to provide a relief measure or two up front as Coloradans weather the pandemic’s economic fallout. In his State of the State address Wednesday, he drew applause for suggesting a short-term reduction in the state’s high vehicle registration fees.
Before any fees raise money, other currents may bring large one-time sums for transportation sooner, including Polis’ proposal to use about $200 million from excess budget proceeds as stimulus spending for transportation projects and CDOT’s Safer Main Streets program.
There’s also the potential that Colorado could receive large infusions from a new federal pandemic recovery package or an infrastructure spending bill that’s beginning discussions in Washington, D.C.
Colorado has a lot of catching up to do. To get a measure of how much it’s fallen short, drive into Utah, where the highways, by and large, provide a much smoother ride.
Nearly every state struggles in some way to pay for transportation maintenance and the need for more lanes or roads, national experts say. But Utah has kept up better than most, as reflected in its 17th-place ranking in the Reason Foundation’s 2020 analysis of each state’s highway conditions and cost-effectiveness. Colorado came in 38th.
The biggest gulf: Colorado’s rural interstate pavement condition ranked 47th in the study, while Utah’s came in seventh.
The Republican-dominated state has stayed on top of its roads by becoming less reliant on federal funding. A recent analysis by the American Road and Transportation Builders Association found the Utah Department of Transportation relied on federal funding for 46% of its annual spending on highway and bridge projects over the course of a decade, below the national average of 51%.
CDOT was well above that average, relying on federal funding for 69% of its annual project spending, the ARTBA study found.
“I feel like Utah is one of the shining stars,” said Carolyn Kramer, director of the ARTBA group’s Transportation Investment Advocacy Center, which tracks state actions on transportation. “Utah is always going back to the table and reassessing and figuring out better ways.”
The state’s biggest move came in 2015, when its lawmakers and governor passed a gas tax increase that included regular adjustments based on the average wholesale price of gasoline. The changes were expected to raise $4.3 billion over 25 years, reducing the state’s long-term shortfall but still leaving about $7 billion unfunded.
Utah’s tax has increased from 24.5 cents per gallon to 31.4 cents
as of January, giving Utah the 24th-highest state gas tax. Colorado’s 22-cent rate is now the eighth-lowest.
Total motor fuels taxes brought in $624.5 million last year. Before a drop in gas purchases in the 2020 fiscal year because of the pandemic, the inflation-adjusted total provided about 3% less than those taxes raised in 1993, according to a Denver Post analysis of CDOT data. The gas tax goes into the Highway Users Tax Fund, which now takes in about $1.1 billion a year for CDOT to share with cities, counties and other agencies.
In a report last year, the Southwest Energy Efficiency Project, in urging a tax increase, said Colorado’s per-gallon rate would be nearly 20 cents per gallon higher now if it had indexed the rate to inflation in 1991, allowing for automatic adjustments. The state would have collected $7 billion more in taxes since then, according to SWEEP’s calculations.
In the absence of that revenue, the state has relied mostly on onetime budget transfers and borrowing in recent years.
The largest move was a $1.9 billion program unleashed in 2017 for state and local projects. The Senate and House then had split partisan control and agreed to issue mortgage-like certificates of participation, a form of borrowing that avoided going to voters for a bond-authorization vote.
The biggest recurring influx of money for transportation was approved in 2009, when the legislature — then controlled by Democrats — passed a set of annual registration fee hikes known as FASTER fees.
Those added fees, paid by vehicle owners, now bring in about $190 million a year for state bridge repairs. Total state collections have amounted to $1.9 billion, allowing undertakings that include the Central 70 project in Denver, which is replacing an aging viaduct.
“There were times when it was on death’s door,” recalled Ter
rance Carroll, a Denver Democrat who was House speaker then. “It took almost an entire session to get it through.”
But in Republicans’ telling, Democrats paid a price for the FASTER move in the 2010 election, when the GOP retook the House majority narrowly.
Since then, Republicans have lobbied against creating any new fees — along with pushing for the state to prioritize highway projects over transit spending and local projects. Former Senate President Kevin Grantham, a Cañon City Republican who presided over that chamber in 2017 and 2018, said bipartisan compromises approved then, making use of existing resources, were better solutions and more in line with voters’ desires.
In Colorado, “now we’re back to the (Democratic) trifecta, and they can effectively do what they want,” said Grantham, now a Fremont County commissioner. “So we’ll see if they’ve learned anything and see if the voters will hold them to account for what they do. I don’t know.”
Rep. Ray Scott, R-Grand Junction, is among current Republican legislators who say they will oppose the attempt to create a new gas fee. They say the new fees under consideration would violate Proposition 117, a ballot measure approved by voters in November to clamp down on the practice by requiring TABOR-like votes for new fee-based enterprises of a certain size.
Democrats argue they’re in the clear because they would use existing state enterprises for the fees.
“If somebody says we need a higher gas tax, and you can prove it to voters, then let them vote on it,” Scott said.
But lawmakers are gun-shy about going to voters, given the recent ballot defeats.
“We felt that was a pretty strong message (from voters) to go solve it,” said Winter, D-Westminster, lamenting that there’s likely to be a partisan split inside the State Capitol. “And what we’re asking is that everyone that uses the roads … all pay a little bit more to solve this.”
Business groups, environmental advocates and local officials have been in talks with Gray and Winter and are eager to see final details of the Democrats’ fee proposals. They’ve been receptive, and several people from those groups said it’s time to do something big.
That’s especially true if the state wants to achieve steep state greenhouse gas goals that call for reducing the total miles traveled on roads each year by 10% by 2030, rather than making room for more traffic, said Matt Frommer, a senior transportation associate at SWEEP, the green energy group.
“We need to basically reverse that trend, which is really, really hard,” Frommer said. “One of the big challenges is … what’s the necessary level of investment to increase transit ridership, bicycle use, teleworking and all of these (road use) reduction strategies to achieve that reduction goal?”
House Speaker Alec Garnett, DDenver, called the fees package “the most pragmatic practical approach that we have seen in the last decade.” He and Senate Majority Leader Steve Fenberg rated its chances as high in the legislative session, which reconvened Tuesday after a pandemic pause.
“I’m optimistic that we’re going to get something very meaningful across the finish line,” said Fenberg, D-Boulder. “The devil’s in the details. Literally every single person who lives in Colorado has a stake in this. And some businesses entirely rely on the roads. … This touches everybody, especially now.”