An effort to sell $3.5 billion in bonds to finance major Colorado highway projects is not the end of a years-long effort to increase road funding in this state, business groups and state Senate Republicans agreed Tuesday as a bill advanced to do just that.
But they called it a good start that would show voters that the Legislature is willing to put some skin in the game before citizens could be asked to do the same in the form of new taxes.
Still, the assurance that supporters of Senate Bill 1 would be willing eventually to look at other sources of revenue for transportation needs beyond the general fund was not enough to get Senate Democrats on board with the bill.
That was particularly true after lobbyists for several state departments came to the Senate Transportation Committee on Tuesday and said they are worried their funds eventually will get cut under the funding plan.
And so SB 1, the major transportation effort of the 2018 session, passed out of its first committee on a partisan 3-2 vote, with Republicans in favor and Democrats opposed, on its way to the Senate Finance Committee.
SB 1 would set aside 10 percent of state sales-tax revenues — about $350 million per year — for transportation needs, particularly the expansion of major corridors like Interstate 25 between Denver and Fort Collins and Interstate 70 through the mountains.
And it would ask voters in November to approve the sale of bonds for those needs, using the set-aside money to make the bond payments and to add as much as $100 million a year to the Colorado Department of Transportation budget for maintenance and road expansions.
While both Republicans and Democrats have called increasing transportation funding a major priority, they have differed on how to get the revenues for that increase.
Democrats on the committee insisted that a sustainable revenue stream that could wipe out the full $9 billion backlog in transportation funding would have to come from a new source such as a sales-tax increase.
But Republicans and business leaders said again Tuesday that voters would not approve a tax hike if the Legislature did not put in a significant amount of funds at a time when it is expecting a boost of some $1 billion in tax revenues by next year over what previously was forecast.
Backers of SB 1, which is sponsored by GOP Sens. Randy Baumgardner of Hot Sulphur Springs and John Cooke of Greeley, acknowledged that more would need to be done even if voters approved the bond sales.
Without this kind of commitment of state funds at a rare time of budget surplus, however, it could be difficult than ever to convince Colorado residents that they should be willing to shoulder the burden of paying more to relieve congestion.
“This is by no means the end of the challenge. This is not enough, but it’s a critical first step,” said Sandra Hagen Solin, spokeswoman for the group Fix Colorado’s Roads, which is made up largely of business groups, particularly those along the northern Front Range. “Skin in the game by the state is essential for the voters to be willing to dip into their pockets.”
Opponents attacked the bill from two angles — what it lacked and what it could mean to other areas of the state budget.
And many of them compared it to House Bill 1242, a failed 2017 effort that would have asked voters to pass a sales-tax hike and would have divided the revenue between state highways, local governments and multi-modal projects like transit and bike lanes.
Groups such as Conservation Colorado and the Southwest Energy Efficiency Project lamented that the bill contains money only for state road projects and that it won’t meet the needs of other cities and counties or of people seeking increased transit spending.
Meanwhile, liaisons for the state departments of higher education, corrections and human services all said they feared that if 10 percent of sales-tax revenues were committed to transportation, they could suffer cuts in their future budgets, especially if an economic downturn were to leave less state funding than is predicted.
The pleas of the state departments brought intense reactions on both sides of the debate. Sen. Nancy Todd, D-Aurora, cited them — and the fears of over-committing to transportation in the event of a future recession — as a primary reason she voted against SB 1.
“If we look at pitting departments against departments in the state of Colorado, everybody loses,” Todd said.
But Cooke called the testimony by the departments “disconcerting and a little bit hypocritical.”
“We have an increase of $1 billion in revenue. The question is: How much is enough?” he said. “A decrease in the rate of growth is not a cut. Anybody who believes that should be in Congress.”
Business groups supporting SB 1, meanwhile, focused on the problems being caused now by increased congestion and said that the state needed to put a significant investment in its revenues toward transportation, even if that is just the first piece in a multi-part funding plan.
Loren Furman, senior vice president of state and federal relations for the Colorado Association of Commerce and Industry, noted that Colorado’s population has been growing rapidly — by 11.5 percent since 2010, to the current 5.6 million, according to the U.S. Census Bureau — without having made significant investments in infrastructure.
R.J. Hicks, lobbyist for the Colorado Motor Carriers Association, added that estimates of lost productivity because of existing congestion, reach as high as $1 million per day.
“We support the general-fund contribution, but we think more needs to be done,” said Tony Milo, executive director of the Colorado Contractors Association, offering his “conditional support” to the bill.
The effort comes one year after the Legislature agreed to put $1.9 billion more toward roads through the sale of bond-like certificates of participation. If SB 1 passes and voters approve the bond sales in November, the planned sale of those COPs will be canceled.
It also comes as leaders of the Denver Metro Chamber of Commerce, which was neutral on SB 1 Tuesday, have said they would like to put a sales-tax measure for transportation on the November ballot.
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