Major transportation bill dies in Senate committee, lacking Republican support

With just two weeks to go in the 2017 session, Republicans last night defeated a bill that would have gone to voters to ask for money to tackle part of the state’s $9 billion backlog of road and transit projects.

The bill’s defeat, in the Senate Finance Committee Tuesday night, leaves just one other major legislative solution on the table.

Senate President Kevin Grantham of Cañon City said last week he didn’t have the support of any of the three Republican members in the finance committee for the bill that would have asked voters for a sales tax increase. And he was right. The measure died with the three Republicans opposed and two Democrats supporting the bill.

“We need to exhaust our options before going to the voters,” said Sen. Jack Tate of Centennial. He also said he believed the situation was not as urgent as portrayed by some, pointing to information from the Colorado Department of Transportation that showed it was making progress on fixing bridges and roads with the worst problems.

The bill would have asked voters to increase the state’s sales tax from 29 cents on a $10 purchase to 34 cents on a $10 dollar purchase. That would have generated $233 million in 2017-18 and $467.5 million the following year. That money would have been used to pay for $3.5 billion in bonds to help cover some of state’s $9 billion backlog of road and transit projects statewide.

In an effort to sway Tate, who was thought to be the swing vote, Mayor Cathy Noon of Centennial brought letters and petitions from his district, and she, along with other supporters, asked that the full Senate be allowed to vote on the bill. Backers of the measure believed it would have passed the Senate with bipartisan support had it cleared the committee.

Noon warned that failure to pass the bill would allow “special interest groups” to put forward a variety of ballot initiatives, and that the better solution would be a measure fully vetted by the General Assembly. Those ballot measures, proposed by the Colorado Contractors Association and the LIbertarian-minded Independence Institute, would bypass the legislature and go straight to the voters to ask for money for transportation projects.

So far, eight ballot initiatives have been filed with the Secretary of State, dealing with transportation funding. The six ballot measures from the contractors seek approval for hiking both sales and gas taxes in order to fund transportation. The Institute’s two measures do not seek tax increases, instead requiring the state to use the annual funds used to pay for a 2000 transportation bonding measure approved by voters. Those bonds have now been paid off, but future dollars were to be dedicated to maintaining those projects.

Finance committee member Sen. Lois Court, a Denver Democrat, said she was “beyond frustrated” with the bill’s defeat. She applauded the sponsors, Grantham and Republican Sen. Randy Baumgardner of Hot Sulphur Springs, for going out on a limb with the measure. “They have come to the conclusion…that this is the best solution to this problem with two weeks left in the session. We don’t have time to find another solution that has been as thoroughly vetted. Why we would think there is another magic solution out there that these gentlemen have not considered, is beyond me.”

Pete Maysmith of Conservation Colorado, which had backed the measure, also expressed frustration, pointing out the voter-approved Taxpayer Bill of Rights allows voters to choose whether to raise taxes and the three Republicans on the committee stood in the way of that choice. 

“Coloradans from across the state weighed in and said they wanted a way to fix our roads and bridges, build safer sidewalks and routes to schools, and  invest in infrastructure to move people, not just cars.”

But others said they believed voters would have rejected the measure, including Sandra Hagen Solin of Fix Colorado Roads. Her group, a coalition of business groups, was officially neutral on the bill Tuesday. But Solin said the group believed the measure had “vulnerabilities that would have made it difficult for voters” to approve, mostly that the measure doesn’t provide enough money for the major interstates in Colorado and that the sales tax increase sought may be too large. “This measure would make promises to the voters that it can’t keep,” she told the committee.

There are still a couple of bills seeking to fix the state’s transportation funding problems, but none are likely to gain enough support in one chamber or the other to pass.

Lawmakers do have one other, albeit smaller, transportation solution available: the bill to reclassify the hospital provider fee. The measure, titled Sustainability of Rural Colorado, is an omnibus bill that covers transportation, hospital and rural schools funding, and money for capital construction in higher education.

The provider fee is a funding mechanism for Colorado hospitals. The hospitals pay a fee to the state based on the number of overnight patient stays and outpatient services. The dollars are then matched by federal funds and redistributed to hospitals providing healthcare to low-income Coloradans. Under the bill, the provider fee would be reclassified to a government-owned business and that stream of money would not longer be counted against the state’s revenue limit. Without reclassification, the fee pushes the state over its revenue limit, triggering tax refunds.

The transportation piece of the bill allows the state to enter into lease-purchase arrangements in order to pay for about $1.35 billion in projects, with 25 percent of that total dedicated to counties with populations of 50,000 or fewer. A lease-purchase allows the state to sell off buildings and then lease them back, using the proceeds for other purposes.

Republicans generally have been opposed to reclassifying the fee, seeing it as a dodge around the state’s constitutionally set revenue limits. But some have been willing to entertain the idea — as long as those limits are lowered once the fee is reclassified. The effect would be to keep a continually tight leash on state spending.

The bill originally suggested lowering the limit by $670 million, roughly the same amount that would be reclassified if the fee becomes a government-owned business. That was a non-starter with Democrats. Negotiations in recent weeks have focused on finding a number both sides of the aisle can stomach. Sources have told the Colorado Independent that negotiations also could include additional dollars for transportation, but much will depend on whether that could win enough support from lawmakers in both chambers.

The provider fee bill is scheduled to be heard in the Senate Appropriations Committee on Thursday.

Photo credit: TheKarenD, creative commons license, Flickr