Proposed sales tax increase could boost funding for transportation projects
The proposal comes as lawmakers remain deadlocked on funding for transportation projects considered long overdue
A coalition of local leaders backed by the Denver Metro Chamber of Commerce wants voters to approve a sales tax increase on the November ballot to pay for projects like the widening of Interstate 25 and the buildout of bike lanes.
The group filed four ballot measures with the Secretary of State on Thursday that would raise between $500 million and $1 billion for transportation projects, according to the chamber, and allow that money to be used to pay for bonds, which would generate even more upfront cash.
A booming population across the Front Range has created traffic snarls on critical corridors like Interstate 25 as commuters drive to work and Interstate 70 as skiers head to the resorts. According to a 2016 report by Denver Regional Council of Governments, or DRCOG, commuters spend 40 hours per year sitting in traffic. And the U.S. Department of Transportation estimates that drivers spend $287 per year on vehicle repairs and operating costs due to driving on roads that should be fixed.
“Our failure to invest in infrastructure is costing us real money,” said Kelly Brough, president and CEO of the Denver Metro Chamber of Commerce. “Drivers in the Denver metro area are paying more than $2,000 a year because of traffic congestion delays, damage to vehicles, accidents and lost gas efficiency.”
The state doesn’t have enough money to address the issue. The Department of Transportation estimates a 10-year funding backlog of about $9 billion, and about a $25 billion funding gap over the next 25 years, according to its 2016 annual report. And the state’s gas tax, which helps fund transportation projects, has not increased since 1991.
The group is seeking a sales tax increase of 0.5 percent, 0.62 percent or 1 percent. The highest increase equals 10 cents on a $10 purchase. Another proposal would increase the sales tax by 0.5 percent and require that $150 million is transferred from the General Fund each year to pay for state and local transportation projects.
The ballot initiatives would direct 45 percent of revenue for interstate and state roads, 40 percent for cities and counties and 15 percent for multimodal projects, like bike lanes and bus routes, according to the chamber.
Brough said what lawmakers come up with this session will influence which of group’s proposals will go on the ballot in November.
A bipartisan bill asking voters to raise the sales tax died in the Senate last session. And this year, Senate Republicans are proposing to ask voters to approve a ballot measure that would use existing state revenue to service the debt on $3.5 billion in bonds.
Opponents of the proposal say the 10 percent commitment from the general fund to pay off the bonds could come at the expense of other state programs in the future when revenue forecasts are not so rosy.
The bill also drew concern from people who want to see more money for multimodal projects.
A report by Colorado Public Interest Research Group, a consumer advocacy group, found that the state needs to spend an additional $1.05 billion dollars per year on transit, biking and walking over the next 25 years. This would ensure, the report states, that Colorado’s transportation system is safe, accessible, affordable, and enhances the quality of life.
The report points out road-widening projects often ease congestion in the short term, but have uncertain long-term effects. Following the $1.67 billion Transportation Expansion (T-REX) project in 2006, pre-construction congestion levels returned within five years.
“Our local communities need the resources to improve our streets, transit options, and walking and biking paths. These proposals will make it easier to get around, protect our air quality, and reduce congestion,” said Summit County Commissioner Dan Gibbs, who is part of the group that filed the ballot measures on Thursday.
Title Photo: Weekday morning traffic congestion on I-25 northbound in Denver. Photo by John Herrick
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