Colorado’s $9 billion question: Governor candidates weigh in on the transportation funding gap
March 10, 2018
Colorado's population is growing rapidly, but its roads and infrastructure are lagging behind thanks to years of underinvestment. State transportation officials now face $9 billion of unfunded, high-priority projects and are increasingly strapped for repairs on existing roads.
Lawmakers at the divided state legislature negotiated for months on a grand funding bargain last year, but it died in the Republican-controlled Senate, where members were leery of asking voters to approve a sales tax increase. (Under Colorado's Taxpayer Bill of Rights, voters must sign off on new taxes at the ballot box.)
The legislature did pass a measure that included $1.8 billion in transportation funding over the next two decades, but the state's infrastructure needs are estimated to be 10 times that amount over the same period.
Front Range business leaders are planning to circumvent lawmakers and take a dedicated sales tax increase directly to voters in November. Their urgency is warranted, according to experts who say that long-neglected infrastructure threatens to dampen Colorado's brisk economic growth.
This is not lost on Colorado's many gubernatorial candidates, who are weighing in on how to fund repairs to the state's transportation infrastructure and investments in its future. With primary races heating up, the Summit Daily spoke with six of the candidates — four Democrats, two Republicans — to hear how they plan to tackle the problem.
The $9 billion question
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There is rare bipartisan agreement that Colorado's failing infrastructure is an urgent problem, amounting to a hidden tax levied through traffic jams, delays and road closures.
Where to get the money to fix it is a different story, with most Democrats advocating for a new, dedicated revenue stream for the Colorado Department of Transportation. Republicans, on the other hand, tend to favor the "couch cushions" approach of finding money in the general fund and using that to bond out the cost of repairs.
U.S. Rep. Jared Polis and former State Treasurer Cary Kennedy, the Democratic front-runners, both say they're in favor of a new funding source for CDOT. Both have put forward extensive infrastructure plans calling for greater investment across the board, but they leave the funding question open-ended.
"I don't think we should have any sacred cows, and it's absolutely fair to talk about using the general fund," Polis said. "We want everything to be on the table, and I'm open to suggestions from Republicans, Democrats and the business community. There are a lot of out-of-the-box ideas out there."
Kennedy said that dwindling federal investment and the strictures of TABOR have led to the neglect of Colorado's road infrastructure. While she supports asking voters for a revenue increase, she said the underlying causes of the funding gap need to be addressed as well.
"The caps on revenue in TABOR have contributed to our state falling behind both in financing infrastructure as well as in financing education," she said. "So I have long called for reforming our TABOR amendment to allow our state to collect tax revenue generated off of growth in our economy."
Republican Doug Robinson says that while TABOR isn't perfect, it's not the problem. He predicts that the business community's ballot measure, which is being developed by the Denver Chamber of Commerce, will be trounced in November.
"We're going to see a ballot initiative and it's going to ask for an increase in the sales tax, and my prediction is that that will be defeated soundly because that is not what the voters want," he said. "Voters want us to fix the roads with the money that we have. But the reality is that we don't have 3 billion dollars out of the general fund."
Robinson proposed taking roughly $300 million per year out the general fund to pay for debt service on roughly $3 billion in new bonds. The general fund is tight, and shifting even small amounts of money around can cause big legislative fights. But Robinson said more efficient management of CDOT — starting with a new executive director from the private sector — could save a lot of money, along with contracting out maintenance to private companies that can do it cheaper.
That wouldn't generate enough money for future investments, but maintenance on existing roads is Robinson's first priority.
"I'm not saying that down the road (a new revenue source) is not something that would need to be looked at," he said. "But today, we have a mandate from the people, which is, 'We want our roads fixed.'"
Former State Sen. Mike Johnston, a Democrat, is skeptical that enough money can be scrounged up in the general fund, given the scope and urgency of the problem. As a Vail native whose family runs an Eagle County bed and breakfast, he said the woes of the I-70 mountain corridor are more than an abstraction.
"For us, this is not just a question of recreation, it's a question of our livelihood," he said. "I think this is a critical need and one that's going to require us to go to the ballot to make additional investments into transportation. That's not something you're going to find in the couch cushions of the state budget right now."
Most candidates agreed that the state gas tax — which has brought in diminishing revenues for years, contributing to the funding gap — is an unlikely savior. As cars become more fuel-efficient and electric vehicles more common, that pot of money will continue shrinking.
"I think what you want to do is you want to have a tax that's hopefully not regressive, so it doesn't hit hardest on the folks that are lowest income, and that is mindful of the way that the economy is changing," Johnston said. "So the gas tax is probably not going to be the best strategy long term."
Attorney General Cynthia Coffman, a Republican, said she is hopeful that there will be a funding measure on the ballot in November. But she doesn't think a sales tax is the proper route.
"I think we need a combination of taking general fund money from the existing budget — bonding against that money — and then I would support a user tax, but not a sales tax," she said. "I don't think the appetite is there for a sales tax increase."
Regardless of where the money comes from, the problem can't be solved with pavement alone, the candidates say. Technological advancements — from autonomous vehicles to the space age Hyperloop One concept — will need to play a role.
The Democrats say that if Colorado continues growing at this pace, the state must also consider a significant investment in high-speed rail, especially on the Front Range. That's a multi-billion-dollar proposition, however, a tall order for a state that has enough trouble paying for its existing roads.
Polis' plan for Front Range rail calls for a modest initial investment of $8 million to plan a route and study fare pricing.
"The big way you pay for rail is you take an advance on future revenues," he said. "And so it all depends on the user projections and the routes and the fares. But we should be able to finance a good part of it with advances on ticket sales."
Businessman Noel Ginsburg, a Democrat, has an even bolder vision that includes a mountain corridor rail system modeled off of Switzerland's. He has no illusions about the cost of such a plan, acknowledging that a revenue source is necessary.
"I think we have to be very thoughtful about what that (source) looks like and what form that that tax or fee would take," he said. "But it's something that I believe we have no choice but to do."
Ginsburg said Colorado has suffered from a lack of straight-talk from its leaders, who haven't been direct with voters about the costs of maintaining infrastructure.
"People run for office promising free," he said. "Whether it's free education going to 100 percent renewables in a timeframe that doesn't make economic or technological sense. And I think that we all should be held accountable for not just bold ideas but bold ideas that can get done. We need to be honest about the investment that it's going to take to do this."
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