Colorado Fiscal Institute
There’s an old adage that’s especially true when it comes to tax and fiscal policy: you can’t get something for nothing. Without a new revenue source, or a permanently booming economy, transportation projects will always come at the expense of other priorities.
The 2018 election is a road trip, one where voters have to decide between two routes for addressing Colorado’s transportation funding woes. One of them, Proposition 109, is a worn-out shortcut riddled with pot holes. The other, Proposition 110, is the only way to get us where we need to go.
Make no mistake, our state’s traffic problems are a big deal. The Colorado Department of Transportation (CDOT) estimates there are roughly $9 billion in backlogged projects statewide. In fact, one of the few things both political parties tend to agree on is that we need to make investments in transportation.
While Prop. 110 uses a fiscally responsible funding mechanism to make a big dent in the problem, Prop. 109 is a poorly written plan that would create fiscal problems for decades to come.
The need for change is clear
Colorado’s current, primary source of revenue for our transportation system is the gas tax. In 1991, the year Colorado raised the gas tax to 22 cents per gallon, the average price of gasoline was $1.14. In 2017, the average price of gasoline was $2.47. And the gas tax? Still 22 cents.
Not only has Colorado’s gas tax stayed flat for more than a quarter of a century, it’s also one of the lowest rates in the country, ranking 40th out of 50 states.
The gas tax might not have changed, but plenty of other things have. Because of inflation and other factors, the cost of building roads and bridges (measured by the Construction Cost Index) have outpaced revenue. One dollar’s worth of construction in 1991 was only worth 32 cents in 2015, meaning the state’s buying power has fallen significantly.
Also, thanks to improvements in technology, vehicles are much more fuel efficient than they were even just a decade ago. That means Coloradans are now paying less for every mile of wear and tear we put on our roads.
What does all this mean for our transportation funding? Even though the number of vehicle miles traveled has increased by more than 81 percent and the state’s population has grown by over 63 percent from 1991-2016, CDOT’s budget has only increased by 31.4 percent. Occasionally, the economy experiences the kind of growth that allows legislators to make deposits in the transportation fund (Highway Users Trust Fund, or HUTF) from the general fund (see figure 1 below). The years when those transfers don’t occur typically line up with bad or mediocre economic times, when resources for funding other state priorities are scarcer.