A report from a clean-energy advocacy group found that Colorado’s revenue shortfall for transportation is due in large part to a static gas tax, and recommended raising it and indexing it to inflation.
“The gas tax was a good idea when it was designed by states in the 1920s,” wrote the Southwest Energy Efficiency Project in its “Sustainable Transportation Funding for Colorado” report. “It is directly connected to road use: the more you drive, the more you pay. It also contains an inherent incentive for energy efficiency, where people who drive more efficient vehicles pay less.”
The Colorado Department of Transportation has a $25 billion funding gap for infrastructure over the next 25 years, which it attributes to greater fuel efficiency of vehicles, adoption of alternative-fuel vehicles, and a 22-cent-per-gallon gas tax that has remained unchanged since 1991. SWEEP dismissed the notion that electric vehicle adoption was behind the funding shortfall, calculating that if all EVs in Colorado were instead typical internal combustion cars, gas tax revenue would increase by $40 million over five years. That is one-tenth of the revenue lost to inflation and fuel efficiency, the group stated.
SWEEP opposed raising fees on electric vehicles, which currently stand at $50 for registration. Of that amount, $30 goes to the state’s highway fund. “An appropriate EV registration fee should be defined relative to what drivers of conventional gasoline vehicles pay,” the report concluded. One piece of legislation to increase EV fees to $120 and escalate them annually died in a state Senate committee in February.
Instead, the organization advocated for raising the gas tax by 20 cents per gallon, which would have been the current price if there were an index to inflation.
Colorado is one of 10 states that has not raised its gas tax since 1991, and such an increase would raise $500 million annually.
The report labels the increase, along with linking the tax to inflation moving forward, as “modernizing” the gas tax. “The modern gas tax will raise revenue without discouraging electrification or overall transportation system energy efficiency improvements,” wrote SWEEP.