DENVER – The long-awaited transportation infrastructure funding bill that was introduced Wednesday night calls for a state sales tax increase.
House Bill 1242, which uses a mix of existing revenue and a special sales tax increase of 0.62 percent over the next 20 years, would raise the state sales tax to 3.52 percent. That would generate an estimated $677 million annually. The bill also calls for a bonding measure of up to $3.5 billion. It has bipartisan sponsorship from leadership in the House and Senate as well as the chairpersons of the both chambers’ transportation committees.
Lawmakers hope the measure will address an estimated $9 billion needed for maintenance and expansion of Colorado’s roads over the next decade by supplying funding for the priority projects that have been identified by the Colorado Department of Transportation.
The tax increase proposed by HB 1242 is contingent on voter approval in November, and would be partially offset by a decrease in road safety surcharges, which are annual vehicle registration fees in Colorado.
The fee decrease would vary depending on the vehicle type, with motorcycles seeing a $10 decrease, cars a $14 cut and trucks and other large passenger vehicles saving $17.
Revenue generated by the tax increase would be allocated solely for transportation infrastructure projects by CDOT, local counties and municipalities, and a newly created multimodal transportation options fund.
CDOT would receive $300 million annually, 70 percent of the remaining funding would be distributed to local governments, and the final 30 percent would go to the multimodal fund.
This bill represents months of work and a compromise from both sides of the aisle, said Speaker of the House Crisanta Duran, D-Denver.
“This transportation plan is a meaningful way to make sure we do what we need to invest in roads and bridges and continue our incredible quality of life in Colorado for years to come,” Duran said.
Sponsors of the bill expect changes to it, but they believe it was prudent to gather input from the rest of the Legislature at this point.
“We wanted to make sure the work that we’ve done up to this point gets put in front of the other 96 legislators and before the people of Colorado, and from this point on, this is going to be as open and transparent as possible,” said Senate President Kevin Grantham, R-Cañon City.
HB 1242 should be seen as the leaping-off point from which debate can start, but neither side will see it as a victory, Grantham said.
The bill has not been well-received by members of the House GOP, who have time and again called for any transportation funding proposal to be revenue neutral in its first year.
“A $677 million tax increase is not the solution to Colorado’s problems, and I will aggressively oppose the passage of this bill,” House Minority leader Patrick Neville, R-Franktown, said in a statement.
Neville said he expects his caucus to follow him in opposing the bill, and is disappointed that the leadership did not involve him in the negotiations.
Neville told the news media Wednesday he recognizes that the current system is not sufficient to address the state’s transportation funding, but he is not interested in what he called a net tax increase.
Assistant House Minority Leader Cole Wist, R-Centennial, said the Legislature should focus on cleaning its budgeting process and using the money already collected through taxes for funding transportation rather than going after a new revenue source.
Grantham responded during a news conference Thursday about the revenue-neutral proposal.
“We talked about a whole lot of things, we talked about a whole lot of options. We talked about maybe some of the ideals on both sides, but we weren’t going to get a bill dropped that had ideal situations for either sides: This is a compromise,” Grantham said.
Even if Republicans in the House oppose HB 1242, it would not be enough to stop it, as Democrats hold a 37-28 seat majority.
The bill does find common ground on requiring increased accountability for CDOT’s use of additional transportation funding.
“It has a number of really important accountability and transparency elements with two committees that will look over things and be directly accountable to the Legislature and the taxpayers,” said Rep. Diane Mitsch Bush, D-Steamboat Springs, and chairwoman of the House Transportation Committee.
It allows for a local control over how some of the funding is used, which is appealing to rural lawmakers and constituents.
Sen. Randy Baumgardner, R-Hot Sulphur Springs, and chairman of the Senate Transportation Committee, said, “This touches every corner of the state, and I think that’s a huge selling point for this.”
While the incentive for the bill has been constituent outreach on the conditions of Colorado’s roadways, the impacts go beyond just moving cars and people, Bush said.
“It’s also about our economic competitiveness. We are falling behind vis-à-vis our major economic competitors, Utah in particular.”