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Bipartisan transportation funding plan would ask voters to raise Colorado sales tax

March 8, 2017 Updated: March 9, 2017 at 4:12 pm
photo - Drivers cruise along I-25 Thursday, October 8, 2015 near Larkspur. (Gazette file photo)
Drivers cruise along I-25 Thursday, October 8, 2015 near Larkspur. (Gazette file photo) 

Legislative leaders rolled out a tax plan Wednesday to pump about $677 million a year into Colorado's ailing transportation system.

The centerpiece for this year's legislative session could cover everything from traffic relief to buses and bike paths. To fund it, voters in November would have to approve adding a 0.62 percent sales tax increase, on top of the existing 2.9 percent state levy.

The plan also comes with lower state vehicle registration fees.

Democrats in 2009 pushed higher registration fees, with the goal of generating about $200 million every year for state transportation projects. Republicans have long loathed the FASTER fees, so rolling some of it back for a larger transportation funding plan signals compromise.

House Bill 1242, introduced late Wednesday afternoon, would also allow for $3.5 billion in bonding, in which voters would approve a loan for transportation funding.

"At a time of such divisiveness in politics and with the elevation of hate and fear, one of the most important things I could do is make sure we continue to do what we have always done in Colorado, which is bring people together," said House Speaker Crisanta Duran, D-Denver.

Duran is sponsoring the measure with Senate President Kevin Grantham, R-Cañon City. The leadership's co-sponsorship offers a positive sign for the bill as it moves through a divided Legislature. To refer the tax question to the ballot, the bill would need to pass by two-thirds in each chamber.

But history and recent polling shows relying on fiscally conservative Colorado taxpayers, and going up against well-financed anti-tax groups, is typically a fool's errand.

Grantham and Duran have emphasized that the plan would let local leaders decide which projects work best in their communities.

Grantham called the introduction of the bill "a mile marker on the long and winding road to a long-term transportation fix for Colorado."

"This bill probably isn't what the final product will look like, because what's being introduced is a work in progress and there's still a lot of debate, compromise and hard work ahead before we'll have a proposal good enough to pass muster with voters," he said. "But I'm optimistic that we'll get there in the end."

Fix Colorado Roads, the primary statewide coalition of business leaders driving the issue, was happy to hear that legislative leadership came up with a bipartisan plan.

"This is the critical first step to addressing the significant needs to alleviate congestion and address safety concerns across the state," said Sandra Hagen Solin, the coalition's spokeswoman. "The bill has a long road ahead but the legislative leaders have demonstrated their leadership on this critical issue by beginning the conversation."

If voters approve the 20-year annual tax, it would start in 2018.

The first $300 million would go to state projects. Of the remaining revenue, 70 percent would go to local governments and 30 percent would go to multimodal transportation projects.

Gov. John Hickenlooper, a Democrat, said he thinks it's important for lawmakers to outline spending priorities in the bill. But that could be thorny, as a priorities list might divide rural and urban interests.

There is an allocation breakdown of funds in the measure, but it does not include a list of prioritized projects. Lawmakers said that list would come soon.

"There do have to be priorities and I think they have to be listed. I think the voters ... they're going to demand knowing what they're paying for," said Hickenlooper, who has made transportation funding a top priority this year.

"It does make it (harder) politically. You can't tell everyone you're probably going to get this."

In early January, a broad coalition of business and political interests paid for polling that gave them information they didn't want to hear: The odds of voters passing a tax hike in November are long.

The good news for them was that 60 percent of those polled said they favored increasing funding for transportation, but they apparently didn't like any of the options presented.

The internal polling data obtained by ColoradoPolitics indicates voters don't favor new taxes. The respondents:

- by 57 percent to 40 percent, opposed a sales tax increase of six-tenth of a cent to raise $667 million annually.

- by 60 percent to 38 percent, opposed a 10-cent gas tax increase to raise $250 million a year.

- by 58 percent to 37 percent, opposed a formula that inlcluded increasing the sales tax by nine-tenths of a percent while decreasing the state's 22-cent gas tax by 10 cents a gallon.

The last proposal would raise $1 billion annually, the amount legislators have said the Department of Transportation needs to keep up with maintenance and growth. Roads and highways face a $9 billion revenue shortfall over the next decade.

House Republicans, who are in the minority, pushed to take much of the money out of the proposed $28.5 billion state budget.

"If it's a change-the-equation type of thing that is revenue neutral, I completely agree that transportation needs more funding," said House Republican Leader Patrick Neville of Castle Rock. "I think our citizens are taxed plenty and too much."

But House Democrats held firm, saying they did not want to cut education for transportation. The fear is that if lawmakers use existing revenue, then money would have to come from elsewhere, which makes schools a popular target.

Neville, however, made a case for restructuring how the state budget is formulated each year, proposing moving major decisions from the Joint Budget Committee to individual committees. The budget would focus on a list of priorities.

Legislative leaders have struggled to find a compromise that can pass the Republican-led Senate and Democratic majority in the House, especially given voters' distaste for tax increases.

"To be successful, we're going to have to go to the voters with specifics, not a blank check," said House Transportation Committee chairwoman Diane Mitsch Bush, D-Steamboat Springs. "We're going to have to make sure local areas get their fair share."

Since 1880, Colorado has voted on 72 taxation questions, and only 24 have passed.

Last year, voters rejected Amendment 72 to increase the state's tax on cigarettes to pay for public health programs after tobacco interests framed it as a "blank check."

The last time Coloradans agreed to raise taxes was in 2013 on recreational marijuana with Proposition AA. But the tax passed after voters had already legalized marijuana under the assumption that it would be taxed and regulated.

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