By some estimates, Colorado’s infrastructure deficit is increasing at the rate of $1 billion annually, and will continue to do so unless local, state and national governments can work together to successfully find new funding sources.
Although there are many theoretically feasible solutions, all have drawbacks. New funding from state and local governments will require voter approval, while new national infrastructure funding will have to pass muster with both houses of Congress and the president.
For Colorado Springs residents, fixing the Interstate 25 bottleneck between Monument and Castle Rock is a major priority.
So where will the money come from?
Raising gas taxes
Colorado’s state gas tax is 22 cents per gallon. It hasn’t been raised since the early 1990s, and consequently has 57 percent less buying power than it did a quarter-century ago. The federal gas tax of 18.4 cents per gallon, which supports the U.S. Department of Transportation Highway Trust Fund, hasn’t been increased since 1993.
Congress has long been wary of attempts to raise the federal levy, even though emergency transfers from the federal government have been required in recent years to cover deficits in the trust fund. Colorado legislators have been equally reluctant to refer an increased gas tax to constituents.
Colorado Democrats have sought to reclassify the hospital provider fee as an enterprise, thereby freeing approximately $600 million to spend on general fund transportation projects. Some Republicans argue that such a reclassification would be a blatant end run to bypass the Taxpayer’s Bill of Rights, the package of revenue and tax limitation measures approved by Colorado voters in 1992. Polls indicate that increasing the gas tax is a non-starter, so legislators might need to settle for another option.
More sales taxes
Getting to a deal will be difficult, since Democrats traditionally don’t like regressive taxes that disproportionately impact working-class residents, while Republicans want to balance any dedicated road tax with cuts elsewhere.
Many local government officials, including Colorado Springs Mayor John Suthers, are leery of sales tax increases. Suthers pointed out that a 0.5 percent increase to the 2.9 percent state sales tax would mean Colorado Springs residents would pay a total sales tax rate of 8.75 percent. Such a high rate, Suthers said, could stifle economic growth and deter companies from moving to the city.
In 2015, Republican legislators introduced a $3.5 billion transportation bond issue, which died in the House. That’s a possibility this year, particularly since the 1999 TRANS (transportation project) bonds will be paid off this year, making an additional $170 million available in the general fund budget. Not surprisingly, officials at the Colorado Department of Transportation want to keep the freed-up cash.
Trump, tolls and taxes
President Donald Trump has informally proposed a $1 trillion national infrastructure project that could help alleviate Colorado’s woes. As originally outlined, funding would only be available to projects that could be privately financed through tolls or user fees. Few projects in Colorado would qualify, even the much-desired widening of I-25 between Monument and Castle Rock. With a price tag of up to $500 million, it seems unlikely that private-sector investors could viably fund the entire project.
Back to the future
Many transportation analysts agree that funding highways through gas taxes isn’t sustainable.
“What happens in 20 years when the majority of vehicles on the road are wholly or partially powered by electricity?” asked former transportation commissioner Les Gruen. “They use the roads, but they won’t pay for it.”
That’s one reason CDOT launched a road usage charge pilot program in December. A road usage charge is based on vehicle miles traveled, treating roads like utilities. It replaces the gas tax, and is calculated by GPS trackers on your car.
Such a levy would, as projected, cost the average passenger vehicle driver 1.2 cents per mile, or $144 a year for 12,000 vehicle miles traveled.
Perhaps reasonable, but will Coloradans agree to let a government agency track their whereabouts? And how do you pay? Would it be collected annually with your registration fee, or billed monthly like a credit card? CDOT has enlisted 100 volunteer drivers who will allow the agency to track their mileage, and levy a theoretical charge of 1.2 cents per mile.
(Editor’s note: This is the second in a two-part series about Interstate 25.)