Motor fuel taxes have long been the mainstay of highway finance in Colorado. But inflation has robbed that 22-cents-per-gallon levy of much of its purchasing power since it was last increased by the legislature in 1991. Now, soaring gasoline prices are renewing a trend toward more fuel-efficient vehicles – a worthy development that could have the unintended consequence of further eroding the financial base for highway construction and maintenance.
The obvious solution to falling fuel tax revenues is to simply raise the tax rate. But in Colorado, the obvious isn’t always easy. Voters would have to approve any new tax hike, and so far, neither the legislature nor Gov. Bill Owens have dared to request such an increase.
Instead, Owens has promoted plans to allocate general tax revenues to highways and urged increased use of toll roads. Local leaders joined Owens to win passage of Referendum C last year, which has channeled some extra money to state highways. But those extra revenues are not shared with cities or counties, and their needs for roads can be significant.
Many local officials, for their part, oppose Owens’ plan to add toll lanes to existing free highways such as C-470. Douglas County leaders have been especially vehement in opposing such notions, which they believe with good cause will only ensure continued congestion as well as causing extra traffic to be diverted to surface streets.
Recently, the Denver Regional Council of Governments (DRCOG) unveiled a list of possible new funding sources that included the innovative notion of a “vehicle miles traveled” tax of 1 cent for every mile driven by area residents. Such a tax could generate $4 billion to $5 billion for metro Denver roads over the next 25 years.
Other possibilities include a 1 percent sales tax increase, which could generate as much as $17 billion in 25 years. Also on the DRCOG option list are increasing the state gas tax, upping automobile registration fees, adjusting the gas tax to rise with inflation, adding a 2 percent lodging tax on visitors and continuation of the 0.1 percent metro football stadium district sales tax past its planned 2012 expiration.
All such options would require voter approval.
With time rapidly running out on Owens’ administration, differences between state and local highway planners aren’t going to be easily overcome. But whoever is elected governor in November should make it a priority to hammer out a common transportation policy with state, city and county leaders.
