Transportation Sales Tax Advances in Colorado Legislature

"The House Transportation and Energy Committee got its first look at a bill that would hike the state sales tax from 2.9 percent to 3.52 percent to pay for transportation projects managed by the Colorado Department of Transportation (CDOT), plus funding for sidewalks, bike paths and mass transit," reports Marianne Goodland for The Colorado Independent. "The measure passed on a party-line vote...with the committee’s eight Democrats in favor and five Republicans opposed."

The measure was rolled out on March 8 to strong opposition from conservative Republicans at the state Capitol and from limited government advocates like the libertarian [Denver-based] Independence Institute and the Koch brothers-funded Americans for Prosperity. But the measure has the sponsorship of state Capitol leaders, including Republican Senate President Kevin Grantham of Cañon City, Democratic Speaker of the House Crisanta Duran of Denver and the chairs of the House and Senate transportation committees.

One of the state's main backers for transportation investment, Fix Colorado Roads, has not taken a position on the measure, primarily because it doesn't require that general funds be earmarked for transportation. The group wants a "permanent, reliable and sufficient funding formula for our roads," but it doesn't propose a funding option, just designation of a percentage of general funds to transportation.

Why not a gas tax increase?

Colorado's gas tax, 22 cents per gallon was last increased in 1991, 26 years ago. It is 29 percent lower than the national average of 31.04 cents per gallon.

"Because of Colorado’s Taxpayer Bill of Rights, any agreement lawmakers reach to raise taxes to pay for roads will have to go to the ballot box for approval," reports Brian Eason for The Denver Post. "And gas taxes? They aren’t as popular with the voting public as they are with state legislatures."

“We’ve done quite a bit of polling over the last two years and have found that the prospect of voters increasing their own gas tax is very slim,” said Tony Milo, executive director for the Colorado Contractors Association (CCA), which for years has lobbied for a tax increase for roads. “They’re actually much more open to some other types of taxes than they are to gas taxes.”

So the sales tax, rather than the gas tax, was chosen because it polls better. But in the long term, it is possible that a road usage charge could become the road funding mechanism. A pilot program was launched in December and is accepting new enrollments.

Hat tip to AASHTO Daily Transportation Update.