Dems, GOP probe way to fund transportation
Lawmakers agree issue is pressing, but unsure of solution
One thing every lawmaker inside the Capitol agrees on: Colorado needs to allocate a lot of money, this year and in the future, to address the state’s multibillion-dollar transportation project backlog and additional road, bridge and transit needs that will arise as people continue to move here.
Capitol Democrats and Republicans, the governor’s office and numerous outside groups have been and still are engaged in talks about a potential bipartisan deal that could come at some point this legislative session, which ends in early May.
But in the event that no legislative solution is reached this year — a very real possibility — it may be up to voters to decide in November, one way or another, whether this growing state, with its increasing traffic and limited transit network, will finally have a sustainable source of revenue for transportation.
“I want something that is bipartisan. I would like to see a solution,” said House Speaker KC Becker, a Boulder Democrat. “But I’m willing to go back to the ballot.”
Colorado does have a dedicated revenue stream for transportation: the gas tax. It’s just increasingly unreliable as more
people turn to electric and hybrid vehicles, and it hasn’t been increased, even to adjust for inflation, since the 1990s.
Republicans, who are in the minority in both chambers of the state legislature, say the solution to the problem — or at least a big component of the solution — is to allocate large sums from the state’s general fund toward transportation.
They want about $300 million for that purpose in this year’s budget, which the legislature will deliberate on next month. Democrats, however, aren’t too open to this idea, because, in the absence of a new revenue source, pouring millions into any one budget priority necessarily means that those millions will have to be diverted from another priority. Becker and other Democratic leaders say they have yet to be convinced of a way that can be done responsibly.
Democrats are much more open to the idea of raising fees on drivers as a means of generating new revenue.
Reasonable minds at the Capitol disagree over whether taxes and fees are actually all that different. The gas tax is really more of a fee, argued Senate Majority Leader Steve Fenberg in an interview last week with The Denver Post. In a separate interview, Senate Minority Leader Chris Holbert rejected that theory and added that other road fees should be in fact be reclassified as taxes.
It’s not a semantic difference: Fees can be raised by the legislature, but tax increases require voter approval.
“It may be a fee on car registration. It may be an electric vehicle fee,” Becker said. “There are a whole bunch of different ways we could do it.”
The question she and other Capitol Democrats are wrestling with: “Are you going to do a tax by going to voters or are you going to do a fee inside the building?”
Either course carries political risk.
Holbert said he thinks that if Democrats raise fees, they’ll be signing away their majorities come 2020.
“If the Democrats want to go increase so-called fees when they ought to be taxes and help us win majorities, OK. But the statesman in me says don’t do that,” he said.
His prediction that increased fees alone could flip the Capitol may include a measure of wishful thinking, but there is some truth to what he’s saying, said Scott Wasserman of the liberal Bell Policy Center, which is closely involved with these ongoing transportation funding talks.
“All of the ideas to come up with a dedicated revenue stream are politically unpopular. Gas taxes poll terribly … and these fees that people are talking about are going to be politically dicey,” he said.
They could be made less touchy if packaged in the right deal, some believe.
“I think it probably takes a couple things working together,” Becker said. “The only fee Republicans really support is an electric vehicle fee, but we’re not going to pass that unless we get something else for it.”
Added Fenberg: “I think there needs to be a package. … I also think it’s such an important issue that we should approach it knowing it may take a couple of years to get the right deal cut. The sooner the better, but I think it’s important that we actually solve this problem, because it’s pretty fundamental to our state and our budget.”
Ballot implications
Becker and Holbert say they’re hopeful something can get done this legislative session. Outside groups working on the issue say the same. Mike Kopp, the former Senate minority leader who now heads the conservative organization Colorado Concern, called this a “remarkable” opportunity for cooperation and compromise to advance a matter of statewide interest.
“Because the public desire is so great, I think there’s an opportunity to find common ground apart from those perfection-ornothing positions that have wound up providing the people of the state nothing,” he said.
But Kopp could not identify a specific package he thinks has legs. Neither did any of the elected leaders interviewed for this story. This speaks to the fact that those talks are very much ongoing, but also to the fact that substantial points of disagreement make a compromise very difficult to find.
This reality could motivate Democrats in the legislature — or outside of it, through Bell and other liberal groups — to consider placing a tax increase on the 2020 ballot in order to find new revenue for transportation, and possibly for other needs, too.
It’s been clear for weeks that at least one progressive tax measure is almost certainly headed for the ballot, but it’s not yet known whether transportation funding will be a part of it. And if Democrats don’t try to reclassify the gas tax as a fee — Fenberg didn’t rule that out — they could ask voters to raise it.
Tax hikes have lately been a losing proposition for Colorado Democrats at the ballot box. In 2018, voters denied a tax increase that would’ve funded transportation, and late last year they denied Prop CC, which would’ve directed
Taxpayer’s Bill of Rights refund money toward roads and bridges.
After CC lost, Democratic Gov. Jared Polis said the legislature should solve the transportation funding quandary itself. He’s wary of a pending bill brought by Democrats that would allow local governments to create their own regional districts to pay for transportation projects, and he’s wary of returning it to voters this year.
“The governor has been very clear with GOP leadership, when we meet with him every other week, that he doesn’t support going back to the ballot,” Holbert said. “That only leaves two options: general fund, because we have the authority to allocate those dollars, or fees. There isn’t another option that I’m aware of.”
Some Democrats are more fearful of the ballot approach than others. If a bipartisan deal doesn’t emerge, though, that approach may be the only one with any possibility of delivering new money in the very near future — something everyone involved professes to want.
“We all sit in traffic, and we hate it,” Fenberg said. “But we know it will only get much worse.”