Transportation funding bill continues to change as session winds down
Author: Joey Bunch - May 2, 2018 - Updated: May 10, 2018
Instead of inking a final deal to pay for transportation, a Colorado House committee was still using pencils with big erasers Wednesday afternoon, as Senate Bill 1 continued to undulate with amendments between to fix highways while ensuring education money doesn’t help cover the cost.
But because the House planned to convene Wednesday night, the Transportation and Energy Committee never got around to a vote. They’ll reconvene Thursday afternoon to vote on amendments and the legislation that would put billions of dollars into wider, faster interstates, bridges, local projects and transit in this fast-growing state.
All the while outside interests say they might put a question on the ballot in November to hike sales taxes for transportation.
The Republican-sponsored bill passed the Senate unanimously on March 28, but it didn’t make it before a House committee until Wednesday, a week before the session ends on May 9. With amendments that are certain — and many — a final bill will have to be negotiated between the Democratic-led House and Republican-held Senate. And when Democrats rolled out their overhaul of Tuesday, they couldn’t have seemed farther apart.
Democrats scraped a proposal to Senate proposal to ask voters in 2019 for the right to take out $3.5 billion in bonds for projects statewide and repay them over 20 years with $250 million annually from the state budget. The draft of amendments presented to reporters on Tuesday offered a pay-as=-go system of funding with no borrowing in the bill.
Wednesday, Democrats had a new plan to issue bonds to jumpstart projects using the $100 million from last year’s high-profile Senate Bill 267. That bill aimed to put $1.9 billion over 2o years into transportation by selling and leasing back state buildings, plus $50 million already in the state highway department budget from existing gas taxes.
The amendment offered Rep. Faith Winter, D-Westminster, also would $55 million from the state budget to provide a total of $205 million total for bonding. The fund also would include a reserve, so that if the economy slowed it would buffer against the need to tap other parts of the budget to repay the loan. Sixty person of the money would support state highway department projects, 25 percent would go to towns and counties and 15 percent would go to transit and other multi-modal projects.
“Transportation is very important, and we need a long-term fix,” Winter said.
The amendment, she said, provides bonding and addresses concerns from education advocates, who are afraid that schools will get less money in an economic downturn if the state has loan payments it’s obligated to meet first.
A day earlier, Winter proposed using $495 million already in the in next year’s budget then potentially taking $166 million in each of the next five years, if future legislature choose to spend the state budget that way.
Senate Bill 1‘s House sponsor, Rep. Perry Buck of Windsor, had problems with what her fellow Republicans agreed to in the Senate, particularly moving a vote for approval to borrow the $3.5 billion until 2019.
Some legislators want to wait until after a Denver Metro Chamber of Commerce-led ballot initiative could ask voters to approve a sales tax increase of up to a penny in November, which could repay those bonds. Others don’t think voters will approve it and the money should come from existing taxes paid in to state budget.
Waiting is an expensive proposition, Buck said Wednesday, because problems will get worst and costs and likely bond rates will rise higher costing millions more to repay each year, calling it “fiscally irresponsible.” She wants the bonding question on the ballot this fall.
“We are in a rising interest rate environment,” she said. “… If the interest rate for trans (bonds) rises only by 1 percent, it could cost the state an additional $327 million in debt service. I’m not sure I’m willing to pay that kind of interest rate roulette with taxpayers money.”
Buck said that instead of a fixed dollar amount from the budget, it makes more sense to rely on 7.5 percent of annual state income from sales and use taxes to ensure there’s enough money to repay the bonds.
The Colorado Springs Chamber & EDC asked legislators to bond using money from the state budget for major corridors and regional importance.
“Senate Bill 1, as passed by your colleagues in the Senate, meets most of the things on our wish list,” she told the committee.
Local governments, such as Colorado Springs have passed local taxes to support local transportation projects and local transit, said Rachel Beck, the chamber’s vice president of government affairs. Dollars that go to the state highway fund already flow to local coffers, including transit and other multi-modal projects.
“We in the Pikes Peak region have put a lot of our local sales tax capacity toward our own local needs,” Beck said. “We think that’s the appropriate way to do it. Those were conversations that occurred between local community leaders and voters, a program was put together that meets our needs and the way we think is appropriate, and we went to the voters and asked for their approval.”
The Colorado Farm Bureau tapped the brakes on that suggestion, however.
Garin Vorthmann, the lobbyist for the influential alliance of farmers and ranchers, said cities can afford to pass taxes for transportation, but “communities in rural Colorado won’t be able to have this option, further aggravating the divide between urban Colorado and rural Colorado.
“Transportation is a problem for the whole state and deserves a statewide solution.”
Truckers are paying $1 million more a day in fuel, time and overhead because of the gridlock and congestion, said Sean Egan, president and CEO of Iron Woman Construction and chairman of the Colorado Motor Carriers Association.
Egan said he supports Colorado’s teachers and thinks the state should put more into education.
“Having said that, I think we’ve neglected transportation too long,” he said. “That’s why I’m here, right? I think out transportation system is on the brink of collapse, ad that’s the motoring public.”
The cost of a bad transportation system puts trucking companies on the brink to cover those costs.
“It’s also a cost we have to pass on to your constituents,” Egan said.
Sandra Hagen Solin, who represents the business coalition called Fix Colorado Roads, which has driven the statehouse transportation issue for years, said growth has driven the transportation issues and new business fueled by a better transportation system will drive new revenue that can support the state, including education.
She said Fix Our Roads is “saddened” by pitting transportation against schools.
“They all work together,” Solin said. “There’s a symbiosis between the two. It’s important to keep that in mind as you look at the numbers.”