Denver chamber to drop ballot question to raise state sales tax for roads
Author: Joey Bunch - February 8, 2018 - Updated: February 8, 2018
Update: The chamber said Thursday morning it will hold off on filing paperwork a few more days while it works out some details. A chamber official initially expected to file the initial request with the Secretary of State’s Office Friday.
The Denver Metro Chamber of Commerce will submit paperwork within the next week to get on the ballot in November with a sales tax to fund transportation across the state.
The chamber leads a statewide coalition proposing one of three potential requests to voters: for 0.50 cents, for 0.62 cents or a full penny, Chamber President Kelly Brough told Colorado Politics.
She said which question amount would depend on the state revenue forecast that comes out in mid-March, as well as the outcome of the current legislative session; lawmakers are considering legislation to put more money from the state budget into transportation.
“We think it’s important to find out what the state can contribute before we finalize what the right number is to ask voters to finish the work,” she said.
The half-cent sales tax is expected to raise about $500 million a year — 45 percent for interstates and state roads, 40 percent for cities and counties and 15 percent for transit.
Colorado’s state sales tax is one of the lowest in the country, 2.9 percent, but municipalities can tack on as much as they can get voters to approve to support local needs.Thirty-seven municipalities in the state already have effective sales tax rates of more than 8 percent, led by Winter Park at 11.2 cents and Silverton at 10.4. The proposed sales tax would land on top of existing taxes.
To get on the ballot, the measure needs 98,492 signatures in six months, which represents 5 percent of the total votes cast in the last secretary of state’s race.
Brough said a sales tax would spread the cost across Colorado, as well as allowing the state’s nearly 80 million tourists a year to chip in from the nearly $20 billion a year they’re spending.
A chunk of the proposed tax money — along with whatever the legislature and Gov. John Hickenlooper agree on — would repay bonds to jumpstart such projects as widening Interstate 25 north of Monument and Denver, as well as addressing traffic jams of Interstate 70 through the mountains.
Fix Colorado Roads, a similar coalition of Front Range and mountain business interests, has been working on a legislative remedy to the funding issue at the Capitol.
“We applaud the Denver chamber for their pursuit of new revenue, but it doesn’t remove the responsibility of state leaders to direct a meaningful portion of the growth in existing state revenue sources for a critical multibillion dollar bonding program,” said Fix Colorado Roads’ Sandra Hagen Solin. “Voters expect no less. “
Because of growth and a long history of underfunding by the state, Colorado needs $20 billion for transportation over the next two decades, the Colorado Department of Transportation has told the legislature.
Last year, lawmakers considered bipartisan legislation to ask voters to approve a sales tax. The proposal started at 0.62 cents, was lowered in committee to 0.50 then was voted down by Senate Republicans who didn’t feel good about asking for a tax increase during booming economic times in the state.
This year, Senate Bill 1 would take $300 million a year out of revenue growth in the budget to repay bonds
Brough said Coloradans are tired of paying with their time and money in traffic. Commuters pay an average of about $2,000 each a year because of time, extra fuel, repairs, accidents and other hidden costs associated with traffic congestion in the state, she said, pointing to a study released last year. The report cited a total of $6.8 billion a year in costs associated with traffic congestion in Colorado.
“For us, the business community, what we realized is it’s cheaper to make the investment than continue to pay those kinds of costs,” Brough said.
She said the chamber is working with a statewide transportation coalition of more than 70 members.
Though past statewide tax increases have had a tough go of it Colorado, Brough said the focus of those organizations reflects the how Coloradans feel about the state moving ahead on transportation needs and transit.
“They really are demanding that someone invest in their state and fix this problem that’s affecting their quality of life and commerce in this state,” Brough said. “And I’m proud to be part of a coalition trying to do it.”
The Colorado Springs Chamber of Commerce and Economic Development Corp. hasn’t been onboard with proposed sales tax hikes before, but cautioning that it would be a bitter pill for those cities who have addressed their needs by passing local sales taxes already. The state hike would make it harder for local governments to ask voters for future increases, as well.
Colorado Springs voters already have approved 1.62 cents for local transportation. The city sales tax sits at 8.25 percent.
“Adding additional state sales tax pushes us up to a level that would put us economically at a disadvantage to be competitive,” said Rachel Beck, the chamber’s vice president of government affairs.
The conservative Independence Institute in Denver Wednesday released a poll by Magellan Strategies and Public Policy Polling that indicated 72 percent of likely voters borrowing $3.5 billion for roads, but not raising taxes to go with it.
Jon Caldara, the Independence Institute’s president, renewed his promise to seek a ballot question called Fix Our Damn Roads which calls for repaying the bonds from the state budget.
“The polling also clearly showed that if the “Fix Our Damn Roads” measure was on the ballot along with either one of the competing measures, both measures would fail,” the Independence Institute stated.