A nearly $5.4 billion transportation bill under consideration in the Colorado legislature would tackle several big-ticket items at the same time — fixing and expanding highways, boosting transit and other alternatives to driving, and rapidly expanding the use of electric vehicles.
There’s a lot to debate in Senate Bill 260, Democratic lawmakers’ bid to stake out sustainable funding streams for transportation into the future and address climate change. They propose a half-dozen small new road-user fees that would raise billions of dollars — and would affect most people in the state — all while navigating around state fiscal roadblocks that would have required going to voters to pass more straightforward tax increases.
The package includes serious money for projects at both the state and local levels. And the electric vehicle programs that lawmakers envision would be among the nation’s most ambitious, aiming both to increase the number of clean-energy vehicles on the roads and to expand the charging infrastructure to support them.
The bill passed the Senate May 17, with little Republican support, and now is under consideration in the House. Here is a look at its major components.
How much the bill would raise
The bottom-line projection over the next 11 state fiscal years — through 2031-32 — is nearly $5.4 billion, up slightly from nearly $5.3 billion when the bill was introduced. Of that, about $3.8 billion would come from the new fees over 10 years, starting when they take effect mid-next year.
The rest, $1.6 billion, comes from state budget transfers — many of those already planned from prior transportation commitments — and new state and federal stimulus dollars approved in recent months. A small portion of the budget transfers would recur each year.
Lowdown on the fees
While some of the proposed fees would increase on set schedules initially, all eventually would be pegged to inflation or another index that accounts for rising construction costs. Collection would begin in July 2022 and continue beyond 2032, with no sunsets.
Fees are listed by how much they’d bring in over the first decade:
- Gasoline purchases ($1.6 billion): A “road usage” fee would begin at 2 cents per gallon, ratcheting up a cent per year to 8 cents in mid-2028, with inflation adjustment beginning three years later. It would be on top of the state’s existing 22-cents-per-gallon gas tax. Analysts estimated the new fee would cost the average driver $28 in the first year and more as it rises.
- Retail deliveries ($1.2 billion): A 27-cent delivery fee would apply to orders — including those made online — for goods and most other items subject to sales tax, including restaurant food.
- Diesel fuel purchases ($401 million): This fee would follow the same schedule as the gas fee, starting at 2 cents and rising to 8 cents by mid-2028.
- Electric vehicle registration fees ($322 million): The state’s existing $50 registration fee for plug-in electric vehicles would be pegged to inflation. New annual EV fees would be phased in on a 10-year schedule to offset owners’ tax savings by not buying gas. For plug-in hybrids, the fee would start at $3 and rise to $27, and for full-electric vehicles, it would start at $4 and rise to $96.
- Ride-hailing fees ($203 million): A 30-cent fee would apply to prearranged rides provided by services such as Uber and Lyft, with a discounted 15-cent fee if the ride is in a zero-emissions vehicle. The fee doesn’t apply to taxis, but the bill orders the state to conduct a “parity study” for that industry.
- Car rentals ($92 million): An existing $2 per day fee for car rentals up to 30 days would be indexed to inflation, and the fee would newly apply to car-share rentals lasting 24 hours or longer.
The bill includes short-term reductions of vehicle registration fees for all drivers of $11.10 in 2022 and $5.55 in 2023, with those fees reverting to normal in 2024.
How the money would be spent
Here is the breakdown of spending through mid-2032, according to a Denver Post analysis of legislative documents and summaries. Percentages are rounded, and some figures are approximate.
- $2 billion (38%): New state projects, mostly work on highways, bridges and tunnels.
- $947 million (18%): Local governments’ distributions from a highway fund for use on local projects and maintenance.
- $855 million (16%): Paying off debt taken under previously approved transportation bills and offsetting registration fee reductions in 2023 and 2024.
- $734 million (14%): Electric vehicle programs aimed at rapidly increasing adoption of clean-energy vehicles — including the conversions of fleets — and providing more charging stations.
- $453 million (9%): Multimodal Transportation and Mitigation Options Fund, with the money available to pay for projects that support alternatives to driving, including transit, bikeways and pedestrian improvements, as well as air-pollution mitigation. Eighty-five percent would go to local governments.
- $209 million (4%): A state air pollution mitigation fund under the Colorado Department of Transportation that would pay for projects in the Denver metro area and the northern Front Range, which violate federal ozone limits, to reduce vehicle traffic and air pollution, including vegetation planting. A special focus would be on communities near highways and those that have high shares of households with low incomes or racial or ethnic minorities.
- $115 million (2%): CDOT’s Revitalizing Main Streets program, which gives grants to local governments to fix up state highways through their downtowns to improve infrastructure and increase safety for pedestrians and other users.
Much of the state funding in some categories would go toward CDOT’s 10-year, $5 billion priority project plan, though it would not be fully funded.
How the bill side-steps TABOR
Raising taxes in Colorado requires asking voters under the Taxpayer’s Bill of Rights. By proposing user fees and using existing and new state enterprises to charge them, lawmakers are sidestepping TABOR. It’s a step that draws ire from Republicans in particular.
SB-260 also avoids a new requirement for voter approval of larger fees under Proposition 117, which voters passed in November, when a new state enterprise would raise more than $100 million in the first five years. The four new enterprises the bill would create include three geared toward dealing with different aspects of electric vehicles that, if combined, potentially would exceed 117’s threshold.
But the bill’s sponsors and some legal analysts argue each of those three has a different purpose — increasing the community’s adoption of clean vehicles, converting fleets to electric and supporting clean transit. It’s possible the bill could face a legal challenge if it’s passed into law.
Other components of the bill
If passed, the bill also would:
- Extend exemptions in the vehicle emissions testing program from seven years to 10 years for new cars and 12 years for plug-in hybrid vehicles, if federal authorities approve the request.
- Cancel parts of bipartisan transportation-funding compromises passed in 2017 and 2018. Those include a reduction in the state’s TABOR limit, which would allow $225 million more in spending in the coming fiscal year, and a delayed plan to send a $1.3 billion transportation bonding measure to state voters in November.
- Require CDOT and regional planning organizations, including in Denver, to assess the potential for highway expansion projects to increase air pollution and traffic volume.
- Allow those regional organizations to act as regional transportation authorities — potentially seeking voter approval for their own transportation-funding measures.
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