Duran, Grantham unveil deal to raise sales tax, fund $3.5 billion in transportation bonds
Author: Ernest Luning - March 8, 2017 - Updated: March 9, 2017
A long-awaited transportation funding deal introduced by Colorado lawmakers Wednesday proposes asking voters to approve a sales-tax hike in November to pay for $3.5 billion in bonds for road construction, as well as other transit projects.
Majority leaders in the House and Senate hailed the package as a “breakthrough” but also cautioned that the bill unveiled after months of negotiations was still a “work in progress.”
The bipartisan legislation, House Bill 1242, is sponsored by House Speaker Crisanta Duran, D-Denver, and Senate President Kevin Grantham, R-Cañon City, along with the chairs of both chambers’ transportation committees, state Rep. Diane Mitsch Bush, D-Steamboat Springs, and state Sen. Randy Baumgardner, R-Hot Sulphur Springs.
If approved by voters, the measure would increase the state sales tax rate by 0.62 percent to 3.52 percent for 20 years while cutting back vehicle registration fees by about $75 million a year, generating an anticipated $680 million in revenue in the first year.
Adding in $50 million in funds already available to the Colorado Department of Transportation, a total of $350 million raised each year by the sales-tax increase would finance the $3.5 billion in transportation bonds, according to the bill. Of the remaining new revenue, 70 percent would go to counties and municipalities for road work and 30 percent would be distributed for transit projects by a new “multimodal transportation options committee.”
Officials have said there’s at least $9 billion in unfunded transportation needs across the state. Gov. John Hickenlooper and legislative leaders from both sides of the aisle said at the beginning of the legislative session that it was a top priority to come up with a funding solution.
“Every county and city in Colorado will share in the benefits from this transportation package,” Duran said in a statement. “And we will insist on transparency and accountability, so that voters will know where their dollars are going and how they will be used. This package, if approved by the legislature and the voters, would be a major step forward for this state and firmly position us for growth and prosperity for the next 20 years.”
“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.”
It only takes a majority in each legislative chamber to approve sending the measure to the ballot, and with both Grantham and Baumgardner signed on, it appears passage could be likely in both the Democratic-controlled House and the Republican-controlled Senate.
The bill’s supporters could struggle to get Republicans on board. Earlier on Wednesday, before Duran and Grantham’s proposal was unveiled, House Minority Leader Patrick Neville, R-Castle Rock, told reporters that he was happy to consider a transportation-funding measure if it reduced some taxes — for instance, the gas tax — in tandem with raising others.
“If we’re offering tax relief in another area, and we raise taxes in another area, I’m open to that conversation of what that looks like,” he said. “If it’s revenue-neutral year one, I’m open to it.”
According to rough estimates, the bill introduced Wednesday would net an additional $600 million in taxes in its first year.
The spokeswoman for the Northern Colorado Legislative Alliance and Fix Colorado Roads, a bipartisan coalition devoted to increasing transportation funding, called the legislation a “critical first step” in solving the problem.
“We are thrilled that the House speaker and the Senate president, along with the chairs of the transportation committees, have put a bipartisan proposal on the table to fund the $3.5B TRANS bonding package Fix Colorado Roads has been advocating for the past two years,” Sandra Hagen Solin told The Colorado Statesman.
“This is the critical first step to addressing the significant needs to alleviate congestion and address safety concerns across the state. The bill has a long road ahead, but our legislative leaders have demonstrated their leadership on this critical issue by beginning the conversation,” she added.
But the legislation could face some stiff opposition.
Michael Fields, state director of the conservative Americans for Prosperity organization, roundly panned the proposal.
“Coloradoans want the Legislature to prioritize the state budget — not raise taxes,” Fields told The Statesman. “Despite Senate leadership publicly saying that a proposal would be revenue-neutral in the first year, Senate President Grantham is now supporting a $677 tax increase in year one. It’s obvious that Senate President Grantham needs to hear more from his constituents — and that’s where we come in.”
Fields said polling shows the measure could already be headed for defeat at the ballot box and vowed to help make sure that happens.
“While we completely agree that our roads need to be fixed, this is not the right solution,” he said. “Polling clearly shows that voters have no appetite for the sales tax increase — and after this measure is defeated, we will be right back in the same position. AFP will continue to be fully engaged in this fight for as long as it takes to defeat this misguided proposal.”