$4 Billion Proposal for Colorado Transportation
Anyone who lives in Colorado knows how heavy traffic can be and how much the roads and bridges are in need of repair. Help could be on the way in the form of a wide-ranging proposal being discussed by state legislators.
According to the Reason Foundation think-tank, the state’s highway system is ranked 38th nationally for overall condition and cost-effectiveness and ranks 47th in the condition of rural interstate pavement. The state’s transportation system has not seen a significant funding influx in more than ten years.
What the Proposal Would Provide
The proposed legislation includes the following stipulations:
- A 2-cent-per-gallon increase in gasoline fees, from fiscal year 2023 to 2029, along with a 6-cent increase for diesel beginning in fiscal year 2023, with a 1-cent increase every two years
- A 30-cent fee for rides provided by Uber, Lyft, and other services, in addition to as-yet-undetermined fees for taxi services
- A 25-cent delivery fee for online purchases
- Additional fees for electric vehicles on top of the current $50 yearly fee, which will increase for battery electric vehicles to $90 and for hybrid plug-ins to $27 by fiscal year 2032
- Over the next 11 years, $1.23 billion in additional stimulus and general fund spending
- A reduction in 2022 and 2023 vehicle registration fees
According to the proposal summary, the new fees and spending will total nearly $4 billion spread out over the upcoming 11 years, and the average consumer can expect to pay approximately $28 annually.
The Argument for the New Fees
Gov. Jared Polis is partnering with Senate Majority Leader Stephen Fenberg, Sen. Faith Winter, Rep, Matt Gray, and House Speaker Alec Garnett to sponsor the legislation. All of these lawmakers are Democrats, and the Democratic Party controls both legislative chambers.
Most of Colorado’s existing state transportation revenue relies on a 22-cent-per-gallon gas tax that has not seen an increase since 1991. That tax is 6 cents lower than the 28-cent national average. These Democratic legislators believe that in addition to the tax already being too low, the tax’s purchasing power has been impacted by more fuel-efficient vehicles, inflation, and rising construction costs.
Many Republicans have voiced objections to the proposal, suggesting instead that the state should rely on federal stimulus funds to improve the transportation system. They are working on a counterproposal.
Fees, Not Taxes
According to Colorado’s Taxpayer’s Bill of Rights (TABOR), established in 1992, new taxes require a public vote. Over the years, voters have defeated many propositions to raise taxes for transportation funding, so the fee structure alleviates the voting requirement. This bill will be debated and decided by lawmakers, not at the ballot boxes.
Intended Improvements for Colorado
The proposal sponsors assert that they are trying to plan for the future by creating new fees to fund the state’s transportation system. For example, the electric vehicle fee, which is currently $50, would increase as construction costs rise. The state has set a goal for 940,000 electric vehicles by 2030, so these and other electric vehicle fees could be the primary revenue source for the Colorado Department of Transportation (CDOT) for many years to come. The proposal would also allow for funding of electric vehicle charging stations and replacing entire fleets of state vehicles with electric models.
“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. Polis stated. “I look forward to working with legislators and stakeholders to make this vision a reality.”
At present, CDOT has a 10-year, $5 billion project list that is not entirely funded. Among those projects are expanding critical highways, such as interstates 25, 70, 76, 270, and U.S. 285, and repairing 2,600 miles of rural roads. Of the proposed fees, $1.6 billion would help support those projects. $1.1 billion would be earmarked for local city and country projects.
If this proposal is successful, Colorado’s infrastructure construction could see a substantial boost, and drivers could enjoy improved, less-congested roadways.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.