Colorado transportation funding bill arrives, calling for sales-tax hike, $3.5B in bonds

Following eight months of negotiations, the Colorado Legislature’s leaders late Wednesday introduced a 20-year transportation-funding bill asking voters to approve a sales tax hike to generate some $677 million per year for highway and transit projects — without making significant cuts to existing state revenues.

Observers, including Gov. John Hickenlooper, quickly referred to House Bill 1242 as a starting point, saying they expect details about everything from the size of the tax hike, to the allocation of new revenues, to be up for debate in the two months that the Legislature has left in its 2017 session.

But House Speaker Crisanta Duran, D-Denver, and state Senate President Kevin Grantham, R-Cañon City, both expressed gratitude at finding a compromise they believe can muster support of their two parties’ lawmakers before they take their case to voters.

“We want to make sure that roads and bridges and transportation options across the state are adequately funded for generations to come,” Duran said shortly after introducing the bill just past 5 p.m. Wednesday.

She will co-sponsor HB 1242 in the House along with state Rep. Diane Mitsch Bush, the Steamboat Springs Democrat who chairs the House Transportation and Energy Committee, which will hear the proposal first.

“Introduction of this transportation bill doesn’t mean we’ve arrived, just that we’ve hit another important mile marker on the long and winding road to a long-term transportation fix for Colorado,” Grantham said in a statement.

“This bill probably isn’t what the final product will look like, because what’s being introduced is a work in progress and there’s still a lot of debate, compromise and hard work ahead before we’ll have a proposal good enough to pass muster with voters. But I’m optimistic that we’ll get there in the end,” he added.

Grantham will sponsor HB 1242 in the Senate with Sen. Randy Baumgardner, R-Hot Sulphur Springs, who chairs the Senate Transportation Committee.

39% to cities and counties

The heart of the bill — and what voters will be asked to approve if it passes the Legislature — is a 0.62-cent sales-tax increase for 20 years beginning in 2018, bringing the statewide sales-tax rate from 2.9 percent to 3.52 percent in addition to local sales taxes.

The proposed tax increase is higher than some transportation advocates would have liked, as several have said a hike that big has not fared well in early polling.

To offset that, the Legislature would reduce the road-safety surcharges passed on vehicle registrations in 2009 through the controversial FASTER bill that increased registration fees to raise a smaller amount for road and bridge improvements.

Mitsch Bush, the House transportation committee chair, said she did not know the exact amount of state revenue that reduction would cut, though it would be just a portion of the roughly $323 million generated each year from FASTER fees.

Voters also would be asked to take the new revenue and use it to sell $3.5 billion worth of bonds that would allow the Colorado Department of Transportation to begin right away on larger, high-dollar projects such as expansion of Interstate 25 up to Fort Collins and I-70 through the mountains.

The renewed TRANS bonds, first issued in 1999 following voter approval that year, would be repaid with $50 million from the general fund each year before the state can access the new revenue, meaning the Legislature would have to set that amount of money aside annually.

Of the new revenue, $300 million each year would go into statewide transportation projects, a total that equals 44 percent of the new haul.

Roughly 39 percent would go to cities and counties, which would have great flexibility on how to spend it on local transportation needs, Mitsch Bush said. And about 17 percent would go to a newly created multi-modal transportation options fund.

That fund — which would receive less than the 30 percent of new revenues that transit advocates had been pushing for— would cover interregional projects involving rail, buses and other types of transit.

And at least 25 percent of the money in it would be set aside for pedestrian and active-transportation projects designed for users of non-motorized equipment, such as bike lanes and sidewalks.

HB 1242 does not include a defined list of projects that would be funded. However, legislative leaders indicated Wednesday they likely would add that list as the bill moves along, using existing priority lists formulated by transportation planning organizations.

Neville backs more cuts

With the initial details laid out, the next round of negotiations will begin with conservative Republicans and liberal Democrats in the Legislature who may not see everything they wanted in the bill.

House Minority Leader Patrick Neville, R-Castle Rock, has pushed particularly hard for enough cuts to be made to existing state spending to make the first year of the proposal revenue-neutral — an amount of cuts that is not part of the first version of this bill.

Neville said earlier Wednesday, before the bill was finalized, that it likely would take that kind of commitment on the state’s behalf to win the support of conservatives.

“The bottom line is we have more money than we’ve ever had, and transportation has to be a priority,” Neville said. “If it’s a change-the-equation thing that’s revenue-neutral, I agree transportation needs more funding.”

Senate Democrats insisted earlier in the day, meanwhile, that the bill would need to create a sustainable new source of revenue, address statewide needs and address congestion on the Front Range through multi-modal means.

Senate Minority Leader Lucia Guzman, D-Denver, said she also wanted to see a priority list that is not included yet in the package.

Others who have been involved in the negotiations lauded the effort.

Sandra Hagen Solin — organizer of the group Fix Colorado Roads, which advocated unsuccessfully for a bonding measure without a sales-tax increase in 2015 and 2016— said she was happy to see bonding play a central part in the state’s plans to get to the road fixes quickly.

“Any transportation proposal must not only be politically palatable to pass our divided Legislature but must also be politically viable with voters,” Solin said. “The deal, as we understand it, attempts to strike the right balance between the priorities of the leadership in both houses while considering what might be viable with voters.”

Hickenlooper, who spoke to the media Wednesday afternoon while the final details of the bill still were being negotiated, said his main concern is maintaining enough new funding in the bill over the course of the ensuing negotiations to cover major projects like Interstates 25 and 70 while still addressing local needs.

“I think this bill is going to change dramatically in the next week or two. It will evolve. But I think it’s good to get this bill out sooner than later,” the Democratic governor said. “I’m open to pretty much any way of funding it. It’s just got to be a good deal for the voters.”

Ed Sealover covers government, health care, tourism, airlines, hospitality, restaurants and brewing for the Denver Business Journal. Phone: 303-803-9229.

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