Colorado’s transportation system — from its roads, bridges and tunnels, to its public transportation networks — could see its first major, permanent funding boost in more than a decade under a bill legislative leaders will soon introduce.
The legislation would, according to an outline of the plan released Thursday:
- Raise gasoline fees by 2 cents a gallon every two years, starting in fiscal year 2023 and continuing to fiscal year 2029. Diesel fees would rise 6 cents per gallon in fiscal year 2023, and 1 cent every two years. They would be tied to a construction cost index after that
- New fees on top of an existing $50 annual electric vehicle fee, slowly increasing to $90 for battery electric vehicles and $27 for plug-in hybrids by fiscal year 2032
- A 30-cent fee on rides with services like Uber and Lyft, plus a to-be-determined fee on taxi rides
- A 25-cent fee for online retail deliveries
- $1.23 billion in new general fund and stimulus spending over the next 11 years.
- Reduce vehicle registration fees in 2022 and 2023
The proposed changes are expected to amount to nearly $4 billion in new transportation funding over the next 11 years. The average consumer will pay about $28 more per year, according to a summary of the proposal.
“We're not going to solve absolutely everything when it comes to transportation and this one bill,” Senate Majority Leader Stephen Fenberg said. “But what we actually really do think we're going to solve is the structural issues that are the foundation of it.”
Fenberg, House Speaker Alec Garnett of Denver, Sen. Faith Winter of Westminster and Rep. Matt Gray of Broomfield are sponsoring the legislation in collaboration with Gov. Jared Polis. All are Democrats. The party controls both chambers in the legislature and the governor’s office.
“By embracing the market-driven transition that so many companies are making toward electric vehicles, this proposal will help us create a system that can meet the demands of the future and support an economy that works for everyone,” Gov. Jared Polis said in a statement. “I look forward to working with legislators and stakeholders to make this vision a reality.”
Republicans are raising early objections to the plan. Sen. Ray Scott said that the state should avoid new fees and instead rely on federal stimulus money to fix its transportation system. He called the proposal a "Christmas tree," because it includes various priorities.
"It just doesn’t make sense to me, what I’m looking at so far. What the people in Colorado I believe want is money on the roads and the bridges," he said. The use of fees, he said, was simply a way to avoid voters' will.
An attempt to modernize how Colorado pays for transportation
Currently, most of the state’s transportation revenue comes from a gas tax of 22 cents per gallon that hasn’t increased since 1991. Inflation, rising construction costs and growing numbers of more fuel-efficient vehicles have eaten away at the tax’s purchasing power as well.
Colorado’s 22-cent tax is 6 cents lower than the national average of 28 cents per gallon, according to the Transportation Investment Advocacy Center. Only 12 states have lower taxes as of January 2020, the Center reported.
“We're falling behind in terms of economic competitiveness,” Garnett said. “Coloradans are losing money sitting in traffic and from the deterioration of our road infrastructure.”
The Reason Foundation, a Libertarian think-tank, ranks the state’s highway system at 38th in the nation in overall cost-effectiveness and condition and 47th in rural interstate pavement condition.
By increasing, or in some cases, creating new fees, the proposal’s sponsors say they are trying to future-proof the funding streams that support Colorado’s transportation system. The existing $50 per year base fee on electric vehicles, for example, would rise with construction costs. New fees on battery-electric and plug-in hybrid electric vehicles would also be created. These fees could ultimately become the primary revenue stream for the Colorado Department of Transportation, the proposal summary says.
Money for road repair and expansion, expanding transit statewide and support for electrification
CDOT has a $5 billion, 10-year project list that is only partially funded. About $1.6 billion from the new fees would help pay for those projects, including 2,600 miles of repairs to rural roads and major expansions of key highways like Interstate 70 at Floyd Hill, interstates 270, 76, 25 and U.S. 285. Another $1.1 billion would go to cities and counties for local projects.
Leaders say road expansion will help reduce traffic and congestion, though research shows that while wider roads add capacity, they can also attract more vehicles. That’s one reason why the transportation agency now favors the use of toll lanes.
“We can't build our way out of congestion,” Nick Farber, director of the High Performance Transportation Enterprise, a division of CDOT, told CPR News in 2019.
Transit projects would also get a boost. More than $360 million would go toward multimodal projects and to mitigate environmental impacts. That money would support local and state projects, like the expansion of CDOT’s statewide Bustang service and a planned Front Range passenger rail line — though that will cost billions of dollars on its own. And 10 percent of the $2.7 billion that will go to CDOT's 10-year plan and to cities and counties would be allocated to multimodal projects.
Another $323 million would help fund new electric vehicle charging infrastructure and support EV adoption in low- and moderate-income communities. New incentives to encourage the replacement of entire fleets — delivery trucks, school buses, and more — will get a $320 million boost. And $81 million will support the electrification of public transit fleets across the state.
Fees are the backbone of this proposal, not taxes
Colorado’s unique tax limiting law, the Taxpayer’s Bill of Rights, requires a public vote for any new tax increase. Though that law dates only to 1992, the state’s history is full of defeated transportation ballot measures.
Most recently, voters shot down Proposition 110 in 2018, which would have raised sales taxes to generate more than $750 million annually for transportation. In 1997, voters shot down a tax and fee increase by a vote of 84-6. A $60 million transportation bond issue lost badly in 1928, as did another bond measure in 1912. The most recent successful statewide ballot measure came in 1999 when voters approved $1.7 billion in borrowing.
The legislature has found new money for transportation occasionally, like about $2 billion generated through borrowing and budget maneuvers in 2017. A Democratic majority in 2009 passed legislation raising about $200 million a year in new fees, which TABOR does not limit.
Fenberg said he thought the new proposal would have passed if it had been put to voters.
“We are literally talking about pennies,” Fenberg said of the new fuel fees. “This is a very small step to make sure that we’re protecting the buying power of the transportation dollars that we have now and into the future.”
But voters will not have a direct say. The legislation would also sidestep a recently passed ballot measure that limits the legislature’s ability to create fee-collecting enterprises. Because, as co-sponsor Rep. Matt Gray explained in January, the state already has some transportation-related enterprises.
The Democratic legislation will be formally introduced in the next few weeks, Fenberg said. Meanwhile, Republicans plan a contrasting proposal.