Voters could face multiple highway funding questions

Posted at 8:51 PM, Feb 21, 2018
and last updated 2018-02-21 22:51:54-05

Its an example of the connection between infrastructure and economics. Qualtek Manufacturing in Colorado Springs ships stamped metal products on our state highways every day.  President Chris Fagnant said his company is known for making daily deliveries from their plant on North Nevada Avenue to the town of Firestone in Weld County. To Qualtek, traffic jams along I-25 aren’t just annoying, they hurt the bottom line.

"We’ve ended up hiring a second driver to cover a lot of the same stops that we used to be able to cover with one," said company president Chris Fagnant. 

According to CDOT, the backlog of highway improvements needed around the state amounts to around $9 billion. 

The good news is, the state is expecting a budget surplus of around $1 billion this year. The bad news is, no one in state government can seem to agree on the best way to spend it.

It’s very likely the Colorado voters could end up with two, if not 3, ballot questions facing them this November all with different proposals on how to fund highway improvements.

A coalition of business groups that lobbied lawmakers for a statewide sales tax increase last year now plans to take their proposal straight to the voters.

Kelly Brough, President and CEO of the Greater Denver Metro Chamber of Commerce, is part of the campaign backing the initiative. She thinks a sales tax hike is the fairest way raise revenue in a plan that promises to benefit rural and urban communities alike.

"Colorado has over 80 million visitors annually and we think, along with other residents, that they should help pay for the roads they are using along with the wear and tear," Brough said.

The campaign hasn’t formally submitted its initiative to Legislative Council, but Brough thinks the paperwork could be turned in by the end of this week. They have drafted a variety of proposals that request tax increases at 0.5 percent, 0.62 percent and 1 percent. 

Brough said they want to ask voters for the lowest amount possible amount but still raise enough money to seriously tackle the infrastructure backlog. The plan would earmark 20 percent of the new revenue for road projects in cities, and another 20 percent for counties.

Rachel Beck, Vice President of Government Affairs at the Colorado Springs Chamber and EDC doesn’t think voters in the Pikes Peak Region will buy it.  She points out that Colorado Springs voters have already taxed themselves twice for roads under the PPRTA and 2C sales tax initiatives.

Voters in Canon City and Pueblo have also passed recent sales tax and fee increases for local paving and construction projects.

"Whatever we come up with has got to be viable at the ballot box because we may get one shot at this and it’s got to be the best possible solution that we can propose to the voters," Beck said.

She favors a plan that would restructure vehicle registration fees, know as Specific Ownership Taxes, by setting the charge as a flat percentage of the car’s value. Under the current structure, vehicles older than 10 years are charged a minimum $3 fee. Beck estimates as many as half of all vehicles on the road today pay the minimum.

This proposal is estimated to raise around $300 million a year in new revenue that would then be matched by $300 million in dedicated general fund spending. Beck hopes to encourage state lawmakers to back the idea as a ballot question.

Colorado hasn’t had a dedicated fund for highway improvements since the expiration of the TRANS bonds in 2007. Around 70 percent of CDOT’s annual $1.4 billion budget is spent just on highway maintenance. 

That lack of dedicated general fund spending may explain why 73 percent of likely voters told pollsters they would approve the Fix Our Damn Roads campaign launched by Independence Institute president Jon Caldera. 

His initiative calls for the State of Colorado to borrow $3.5 billion in bonds to finance construction of the highest priority projects on the CDOT list. It requires state lawmakers to dedicate a minimum of 2 percent of general fund spending repaying the debt. The plan doesn’t raise taxes and forces lawmakers to re-prioritize infrastructure spending within the existing state budget.

Republican lawmakers have introduced two bills in the House and Senate that mirror his proposal. However, House Bill 1119 sets the bond repayment percentage at 7.5 percent of existing state sales and use tax collections. Senate Bill 1 requires a 10 percent commitment from sales and use tax revenue.