Two weeks ago I wrote about a bi-partisan transportation bill just introduced in the Colorado Legislature. You can find that post here. My feelings were decidedly mixed: happy to finally see a bi-partisan bill after years of inaction; disappointed to see something so expensive that didn’t adequately address the top transportation issue, that being the state and federal highways in Colorado.
The bill is HB 1242. You can find our analysis of the bill here. The group mentioned, Fix Colorado Roads, was co-founded by the chambers and economic development groups in Northern Colorado and around the state.
We have offered up some suggested changes like those listed below and have followed this list up with specific amendments to the bill.
The bill will likely pass easily through the House. When it heads to the Senate it remains to be seen whether it can be changed enough to earn our support.
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Conditions to Support HB 1242
As introduced, HB 1242 is a local government and transit bill that does not take care of the key transportation problem in the state, which is to have enough money to maintain and expand the highway and interstate system.
Key questions legislators should be able to answer affirmatively before passing HB 1242:
- Does this legislation fulfill our obligation as a legislature to take care of Colorado’s state and federal highway system?
- Does this legislation adequately address the key transportation corridors in the state?
- If we refer this to the ballot, will this measure garner enough support to pass with voters?
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Changes that should be made to HB 1242
1) Take care of Colorado’s state and federal highways and interstates. As introduced, HB 1242 falls short of that objective with a declining 29.2 percent of the revenue dedicated for that purpose. When other adjustments are made per the bill requirements, the net new revenue to CDOT will only be 29.2 percent of the revenue generated by HB 1242. Changes that should be made include:
- Eliminate the local shareback altogether or reduce it to less than 40 percent. We are open to feedback from CCI and CML about this matter, but suspect that for many communities benefits of the ‘shareback’ are more than offset by other considerations.
- Ensure that the state has the bonding capacity to issue at least $3.5B for priority highways and interstates. As now written, the small CDOT share of revenue is insufficient for this purpose.
- Amend the bill to allow for growth of CDOT’s share of revenue. As now written, the share of revenue generated by this bill for CDOT – the group responsible for maintaining and expanding the highway system – is a fixed amount. Basically, over the two decades of this tax, as the population grows and demands on the system increase, CDOT would be locked into a declining revenue source when inflation is factored in.
2) The proposed sales tax rate should be at a level adequate to generate enough revenue for the state’s highway system without impairing the ability of communities and counties to pass taxes for local needs. Colorado cities and towns depend on sales tax as their primary source of income. A high state sales tax negatively limits the options of local governments. Also, the proposed tax rate should balance the need to generate enough revenue to address the key state transportation needs with the ability to secure voter support. In our opinion, it will be difficult to convince voters to support the proposed level of 0.62 percent. We believe:
- The proposed sales tax rate should be set at a level that generates $275M in new revenues annually for CDOT. That rate is approximately .235 percent. When combined with the direction of 3% ($100M) of existing state sales tax revenues and $50M in existing CDOT revenues, this amount allows for relief of the challenges facing the core state highway and interstate system without unduly impairing the ability of counties and local governments to pass local sales taxes for local needs.
3) The multi-modal share should be eliminated or reduced to less than 10 percent. While multi-modal is an important component of the state’s transportation system, as now written, the portion of revenue in HB 1242 dedicated to transit-related projects is so high that it impacts the state’s ability to take care of its highway and interstate system and will generate voter opposition. We believe:
- The provision in the bill allowing transportation bonds to be used for multi-modal projects should be stricken
- The provision calling for 30 percent of the portion of revenue remaining after the state allocation for multi-modal should also be stricken.
- If a local shareback remains in the bill, it should provide for 100 percent local control of the use of these funds. Communities that want to spend some of all of this money on transit can.
- If local portion is removed, multi-modal shall receive $50M of the total state sales tax revenues.
- The needs of multi-modal will still be addressed in two ways: the flexibility of local communities to use their share for multi-modal; under CDOT policy new capacity will be managed lanes which expedite multi-modal travel options.
4) Provide tax relief to the public through the reduction of the FASTER FEE.
5) Replace SB 228 with a new requirement that 3 percent of existing state sales tax revenue be committed to transportation.
6) Retain the existing provision in HB 1242 to sunset the tax in 20 years.