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Colorado lawmakers debate massive transportation funding bill

Posted at 4:53 PM, May 25, 2021
and last updated 2021-05-26 01:51:34-04

DENVER — A bill to invest billions more in funding into Colorado’s transportation system is quickly making its way through the state legislature.

Senate Bill 260 would raise $5.3 billion in transportation funding over 11 years. Roughly $3.8 billion would come from raising fees on gasoline, delivery, electric vehicle registrations, ride-share services and more. The other $1.5 billion would come from the state’s general fund.

Supporters say the funding is long overdue and will offer a significant and sustainable source of revenue for the state’s transportation needs.

Opponents of the bill argue it goes around voters by imposing fees instead of taxes and by splitting up the revenue into multiple fee-based enterprises.

Republicans pushed for a different version of the bill that would have prioritized using federal stimulus money to fund investments. However, the amendment was defeated in a senate committee.

The latest version of the bill is 207 pages long and covers a wide range of issues, from fixing roads and bridges to air pollution to encouraging more electric vehicles. Here’s a 360 look at some of the more nuanced portions of the bill.

Fees Versus Taxes

The majority of the funding for SB260 comes from increasing fees. They include:

-Gas: 2 cents per gallon to start. This fee then gradually increases every year until there’s an 8 cent fee on gas.

-Delivery: 27 cents per delivery

-Ride-share: 30 cents per trip

-battery-powered electric vehicles road use fees and more

Fees are different than taxes in two major ways. First, fees are paid by the users of a program or service and the revenue generated goes directly to that program instead of to general government functions. Second, tax increases require voter approval under the Taxpayer Bill of Rights while fees do not.

“We don’t have to go to voters on this because all of the other packages that came before had to go to voters because they were tax increases. This is a creative approach that’s not a tax increase where we don’t have to go to voters,” said Rep. Alec Garnett, the speaker of the house.

Andrew Goetz, a professor in the department of geography and environment at the University of Denver, specializes in transportation policy and says voters in Colorado have not been supportive of tax increase or bonding measures in the past.

In fact, Colorado is in the bottom 10 states in the country for transportation funding and has one of the lowest gas tax rates in the nation.

The state hasn’t raised its gas tax since 1991 and because cars are becoming more fuel efficient, drivers are able to go more miles without needing to refuel, meaning more wear and tear on roads with less revenue coming in.

He sees the bill as an innovative way to come up with a funding source.

“We haven’t had such a wide range of different funding sources that’s being proposed in this transportation legislation,” Goetz said. “In terms of the size or the scale of this it’s also unprecedented because we’re talking about raising $5 billion for transportation.”

The bill is also being discussed at the same time that federal lawmakers are considering a move to insert trillions of dollars into transportation needs across the country. Between the two, Colorado could see the largest investment in transportation in decades.

However, opponents of the bill say everyone relies on the roads in one way or another, meaning they will be forced to pay, making it more of a tax than a fee.

“When we add that, we’re saying the tax wasn’t enough and we’re going to add a fee to that. Why would there be a difference between these two things? And, I think that’s a question the voters are going to ask,” said Rep. Hugh McKean, the house minority leader. “I think that Colorado families are being nickeled and dime to death.”

They want a fee increase this big to go to the voters to decide. In an effort to force voter involvement into the conversation, Americans for Prosperity has begun to take steps to propose a ballot initiative that would lower the gas tax.

“As the legislature is looking at increasing and adding fees on gasoline purchases to a certain amount, we’re looking at reducing the state gas tax by the exact same amount,” said Jesse Mallory, the state director of AFP. “What it does is allows the people to be brought into this conversation to decide if we want to pay this fee or not.”

SB260 Versus Prop. 117

Another nuance to the bill has to do with fee-based enterprises to collect and use the revenue earned from SB260.

However, the bill comes on the heels of voters passing Proposition 117, which added new restrictions to fee-based enterprises.

The proposition mandated that legislators could no longer create fee-based enterprises that raise $100 million or more within their first five years without voter approval first.

The initiative does not affect enterprises that already exist. It also specified that legislators could not simply create different enterprises that serve the same purpose.

SB260 changes one state enterprise and creates four others for the revenue. Each of the enterprises is different in its purpose.

“The enterprises are very specific to certain goals and funding sources are also very targeted as well,” Goetz said. “It’s really an interesting way of linking together specific sources of revenue with specific funding needs.”

Here’s a closer look at the purpose of each enterprise:

-Community Access Enterprise: its purpose is to support the widespread, equitable adoption of electric vehicles. It will rely on the retail delivery fee to build more charging stations and provide financial incentives for people to turn in their gas-guzzling cars for electric ones.

-Clean Fleet Enterprise: its purpose is to support a transition to electric vehicles by owners of motor vehicle fleets. It will rely on the retail delivery fee to help companies go electric and provide companion services.

-Bridge and Tunnel Enterprise: this is a current enterprise that is being renamed and repurposed. It will focus on completing bridge and tunnel projects.

-Clean Transit Enterprise: its purpose is to support clean public transit by upgrading buses, construction vehicles and more. It will also help build more recharging infrastructure facilities and pay for studies on the electrification of fleets.

-Nonattainment Area Air Pollution Mitigation Enterprise: its purpose it to mitigate transportation-related emissions in ozone nonattainment areas. Revenue will be used to encourage people not to drive alone, construct roadside vegetation barriers to help with air pollution and more.

“Each serve a separate primary purpose and none of the enterprises serve primarily the same purpose as any other enterprise created,” the bill reads.

No one of these enterprises is expected to generate more than $100 million in its first five years.

Opponents like Mallory have accused the bill’s cosponsors of doing legal gymnastics by creating multiple enterprises in order to get around Prop. 117.

“It’s a complete disregard for the people just said. They said we want the legislature to stop doing this. And the legislature came back at them and said we don’t care,” he said.

McKean agrees and says voters will question why this is happening.

Other republicans disagree and believe the bill’s approach is appropriate. John Suthers is the mayor of Colorado Springs and a former attorney general who is in support of the bill.

“I think they have done a good job in setting up the enterprises,” Suthers said during a May 4 unveiling of the bill. “I think they have designed these in a way that will withstand any kind of court scrutiny.”

Repeal and Replace

Along with increasing transportation funding, the bill also repeals portions of a law that passed in 2018.

Senate bill 18-001 was a bipartisan effort to fund transportation that took nearly the entire legislative session in 2018to accomplish. When it was passed, the bill received unanimous support in the Senate.

“It took a lot of work getting from beginning to end on that,” said Kevin Grantham, who served as the senate president at the time. “There was enough in there that everyone liked and a little bit that everyone didn’t like, which is a good compromise bill and everyone seemed to support it until this year.”

The law injected half a billion into transportation funding from the General Fund. It also called for a ballot initiative to be brought before voters to ask to essentially refinance a bill from the previous year and then leverage the money on bonds.

If voters approved, the bonds would have provided roughly $2.3 billion for infrastructure projects. However, the measure was not placed on the 2019 ballot because two other funding initiatives—a proposed sales-tax hike for roads and a separate bond measure worth $3.5 billion.

Both of those measures failed. The measure was once again punted in the 2021 election. SB 260 would ensure that the measure never makes it to the ballot since it repeals the election portion of SB18-001.

“It’s disappointing that the voters of Colorado don’t even get a say when we actually worked in such a hard and bipartisan fashion in order to get something like that accomplished,” Grantham said. “Not putting it on the ballot I think it’s rather cowardly.”

Grantham knows the law wasn’t going to solve all of the transportation needs for the state, but he believes voters should have had a chance to weigh in on the idea before being charged fees with the new bill.

Winter, who was a co-sponsor on both bills, disagrees, saying the 2019 election and others in recent history proved voters aren’t keen in the idea of bonds and the backers of the 2018 law weren’t ready to go to the ballot again.

“We’re trying to do a more fair and nuanced approach this way and Senate Bill 1 wasn’t that,” she said.

Multimodal Versus Road Expansion

If and when SB 260 is approved, there are also discussions about how the money should be prioritized. Some are pushing for the state to focus more of its attention on multimodal transit and more environmentally friendly options.

“If we look historically at the business-as-usual scenario in Colorado, what we’ve seen is over the last 60 or 70 years is well over 95% of the investment and transportation has been in car infrastructure to make it easier for people to drive,” said Matt Frommer, a senior transportation associate from the Southwest Energy Efficiency Project (SWEEP). “When we make it the cheapest and fastest to drive that’s what people are going to do.”

Part of the bill calls for $750 million to electrify cars, buses and transit fleets over the next decade. It also adds more electric charging stations to relief so-called range anxiety where people are hesitant to buy electric vehicles because they are worried about how far they can drive.

“We’re going to need hundreds more, thousands more fast charging stations around the state for people to have confidence that they can get to where they want to go in an electric vehicle,” Frommer.

Some of the money would also be used to incentivize ride share companies to electrify their fleets to cut down on pollution.

Frommer says carbon pollution causes roughly $2 billion per year worth of damage in wildfires, droughts and more.

The bill also calls for $450 million for multimodal funding and a couple hundred million more for non-attainment. However, the number is dwarfed by the $2.5 billion in the bill for the Highway Users Tax Fund.

“This is probably the largest investment we’ve seen in multimodal but it’s not enough. It’s really not enough,” Frommer said. “Eventually we need to kind of flip this thing on its head.”

Others disagree and say the state needs to focus its attention on expanding roads in order to relieve congestion particularly in more rural parts of the state.

Weld county commissioner Scott James believes the bill is more of a social engineering bill than a transportation bill.

“They are far more concerned with greenhouse gas emissions than they are about getting people from point a to point B. I thought the goal of the transportation system was to move someone from point A to point B,” James said.

He argues that the bill spends more time focusing on how people are going to get from one place to another with electric vehicles than the actual structural improvements the state needs.

“The bottom line is we need to expand the roads regardless of the engine that’s under the hood,” he said.

James wants to see more road expansion across the state since multimodal transit isn’t always as available in rural areas.

In terms of the environment, James argues that getting drivers out of traffic with road expansion will reduce pollution since fewer cars will be sitting in idle.

In the end, James is not convinced the transportation will help the average driver.

“There are billions wrapped up in this piece of legislation and I don’t believe it will impact the common person trying to get to their job and get their kids to school,” he said.

Instead of this bill, James says he wants to see more conversations around raising the gas tax so that voters can have a say.

Taking on Transportation

If SB 260 passes, it would be the biggest boost to transportation funding that the state has seen in decades.

Almost no one is happy with every part of the bill, but bill cosponsors hope there is enough compromise in it that everyone will get something out of it.

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