Statewide Coalition Selects Tax Increase Option For Transportation Funding Fix

May 18, 2018

A statewide coalition of business and community leaders is one step closer to getting a sales tax increase for transportation projects on the November ballot.

On Friday, the group announced it would seek signatures to get an increase of 0.62 percent in front of voters. Before the end of the legislative session, the coalition submitted language for five titles ranging from 0.35 percent to a full 1 percent increase.

Its effort is now focused on just one.

“It has become clear that the citizens of Colorado have no choice now but to take this issue into our own hands,” said Mike Fitzgerald, president and CEO of the Denver South Economic Development Partnership, in a statement Friday. “As a business community we never want to see taxes increased unless it is absolutely necessary. We are now convinced that it is absolutely necessary.”

Coalition members said they would begin circulating petitions immediately.

If successful, the selected ballot question would raise the state sales tax from 2.9 percent to 3.52 percent starting Jan. 1, 2019. The increase would last for 20 years.

It would also be the first statewide sales tax self-imposed by voters to fund transportation projects in decades.

“Maintenance and construction for our state highways are funded by a gas tax, which hasn’t been raised in over 25 years,” said coalition member Tony Milo with the Colorado Contractors Association. “When you combine that with population growth, we are spending less per driver on our highways today than we were in the 1990s.”

The decision comes after the state legislature approved Senate Bill 1 early last week, dedicating an additional $645 million to road projects over the next two years. A chorus of voices from around the state have said it won’t be enough to support the state’s transportation infrastructure needs.

At a transportation-focused luncheon earlier this month, Denver Metro Chamber of Commerce President and CEO Kelly Brough said the new tax would be a small price to pay, as well as drawing from 80 million visitors who use the state’s roads each year.  

“The only way we will ensure that our state funds transportation is that we dedicate those funds ourselves as voters,” she said.

Gov. John Hickenlooper, the keynote speaker at the lunch, said it would be “malpractice” for the state’s voters not to “push for significant resources that we can build infrastructure that we can accommodate that growth.”

“At a certain point, young entrepreneurs and people building businesses and lives are going to start choosing other states to go to if we don’t address this,” he added.

Rachel Richards, Pitkin County commissioner and member of the coalition said a tax increase would support rural and urban communities alike.

“The state highways and local roads that connect our communities and support regional economies are in dire need of repair,” Richards said. “This initiative goes a long way toward addressing those problems and provides the flexibility that local communities need to address their challenges.”

The ballot measure proposes divvying up revenue to four different recipients.

The largest chunk of money — 45 percent — would go to the Colorado Department of Transportation for things like improving I-25 and I-70, as well as other priority projects. 15 percent would go to regional projects, such as local bus, bike and pedestrian improvements.  

The remaining 40 percent would be split evenly between cities and counties.  

In all, the coalition estimates the tax would generate an estimated $766 million annually to chip away at the $9 billion backlog.

If passed, the chamber’s ballot measure would also cancel a proposed 2019 referendum created by Senate Bill 1 that would ask voters to issue $2.34 billion in transportation bonds. 

But are voters ready to pay the price for better roads? 

Jason Rutherford, a Loveland resident, said he is skeptical he’d see quick improvements to I-25 and other roadways — even with an immediate injection of cash.

“I don’t support (a tax increase),” he said. “To tax me for something that I’m not going to see in my relevance for creating income for myself — no.”

Tatiana Gomes sees things differently. She’s a recent college grad and a Denver resident.

“Yeah, I feel like we have grown as a city especially in the five years I've been here,” she said. “And I feel like it's definitely a good investment to expand our freeways. I'd be willing to pay more in taxes to get that result.”

Peter Barris has lived in Atlanta, Boston and New York. He’s been in Denver for two years now.

“This place is so simple and easy compared to those big cities,” he said. “I drive to the mountains almost every weekend. So, absolutely. If it’s going to help make the traffic easier there, sure. Why not?”

That’s exactly the way the Denver Chamber of Commerce is hoping voters will feel in November.

But between now and then, they must collect enough signatures to get their 0.62 percent sales tax question on the ballot. They have until early August to get that done.