When paying for state road work, new tax will be a hard sell

Cross Currents, a column by Bill Christopher
Posted 6/4/18

Be on the lookout this summer for petitioners seeking your signature regarding Colorado’s important transportation issue. There are likely to be two different ballot issues aimed at raising the …

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When paying for state road work, new tax will be a hard sell

Posted

Be on the lookout this summer for petitioners seeking your signature regarding Colorado’s important transportation issue. There are likely to be two different ballot issues aimed at raising the varying amounts of money for badly needed highway construction and repair funds.

A statewide business coalition headed by the Denver Metro Chamber of Commerce has announced its intent to circulate petitions to put a proposal on the November ballot to raise funding for state highway work, local transportation needs and transit funding.

The coalition’s proposal calls for a 0.62 percent increase in the state sales tax rate. If approved by the voters, it would support a $6 billion set of bond issues to fund statewide repairs, road improvements, bridges and repairs.

In its first year, it is estimated that $767 million would be available for Colorado Department of Transportation projects.

A competing bond issue, coming from the Libertarian group the Independence Institute, will be seeking signatures to put a $3.5 billion bond issue on the ballot without any tax increase.

And then, there were three

A third option would be triggered if neither of the aforementioned bond ballot proposals are approved. It was authorized by the state legislature in the waning days of the recently completed legislative session. This option would place a ballot proposition on the 2019 ballot which would authorize borrowing $2.34 billion without new taxes. It would earmark $50 million per year from the state budget.

Solve it in chunks

To put these transportation packages in perspective, the Colorado Department of Transportation has previously estimated that there are $9 billion of needed state highway improvements which have been identified. None of the above three ballot proposals would come close to providing the needed funds to accomplish the entire list.

I would say that no proposal should try to resolve the entire problem in a single bond/tax increase approach. The magnitude of the backlog and expansion of highway projects to address increasing traffic volumes are such that a multi-phased approached over several years is the prudent line of thinking.

The leadership of our state government, both executive and legislative, has let this problem grow with inaction or insufficient action to the point that there is not a single “silver bullet” solution. We have no choice but to “chunk” it. It’s like the old joke: How do you eat an elephant? One “chunk” at a time.

A 0.62 percent sales tax increase is a hard sell

For the sake of argument, let’s say both 2018 proposals garner sufficient valid signatures to make the November, 2018 ballot. While the business coalition’s approach would produce the most funding to tackle highway projects, it is tied to a 0.62 percent sales tax increase.

Stop right there! That is a hard sell in Colorado!

With current combined sales tax rates around 8.7 percent depending on what jurisdiction you are considering, the additional 0.62 percent would clearly take combined sales tax rates over 9.0 percent.

Psychologically, the closer the combined rate approaches 10 percent, the tougher it will be to pass any sales tax increase. Perhaps if the proposal was more modest in its magnitude - say 0.30 percent - it might stand a better chance of passing.

The Independence Institute’s proposition is not tied to any type of a tax increase, and that says it all. Significant increased funding for highway expansion, road repairs, new bridges and interchanges all without a single penny of increased taxes. How can you go wrong with that combination?

Personally, I would support the business coalition package as we need more funding - and the sooner the better. Compared to other states, Colorado tax bills are not that burdensome. It’s early to be making predictions so I will hold off, but you catch my drift.

Finally addressing Colorado gerrymandering

There are still other ballot issues coming in November. The state legislature referred two measures pertaining to overhauling the state’s redistricting process and seeks to at least reduce the partisan gerrymandering which has been around for many, many decades.

Colorado’s track record has been fraught with redistricting problems. Three out of the last four redistricting cycles have ended up in court to resolve the district maps and both major political parties have been guilty of gerrymandering.

One measure would amend the state constitution to explicitly prohibit gerrymandering. New criteria would be established for map drawers setting the senate and house of representatives district boundaries. The goal would be to keep communities of interest intact. Those could include neighborhoods of racial or ethnic groups as well as political subdivisions such as cities and counties.

The second proposal would establish an independent commission to decide the various maps. The changes would put more focus with independent registered voters serving on the commission diluting the influence of the two major political parties. Both of these propositions make just plain good sense.

Bill Christopher is a former Westminster city manager and RTD board member. His opinions are not necessarily those of Colorado Community Media.

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