A House committee Thursday night approved a compromise bill that would remove a limit on future state budgets while preserving some funding for highways.
But some business and transportation groups that testified at the hearing before the House Transportation and Energy Committee said the deal would hurt, not help, road funding.
Senate Bill 228 would repeal the Arveschoug-Bird provision, which limits growth in the state’s general fund to 6 percent a year. Money collected above the limit goes to roads and state building projects.
However, Arveschoug-Bird, named after the lawmakers who sponsored the provision in 1991, also ratchets down the general fund in years when revenues fall, resetting the 6 percent limit on the new, lower total.
Supporters of the bill said the ratchet was killing the state’s budget and would result in the general fund shrinking by $2.5 billion over a decade.
Rep. Don Marostica, R-Loveland, is co-sponsoring the bill in the House with Rep. Lois Court, D-Denver. Marostica, the only Republican in the legislature who supports the bill, said the prospect of high inflation will not mix well with the 6 percent limit and the ratchet.
“I know where we’re headed in the state of Colorado if we continue to keep the ratchet on,” he said. “We have to start over each time we go into a recessionary period.”
The bill would remove the ratchet and limit growth to no more than 5 percent of Coloradans’ personal income every year. That would allow the current $7.6 billion general fund to grow by another $2 billion, a level no one predicts revenues will reach anytime soon.
But the bill also would devote 2 percent of general fund revenues to road construction projects for five years, or an estimated $160 million a year. Rep. Buffie McFadyen, D-Pueblo West, chairwoman of the committee, demanded transportation have some guaranteed funding.
Although some groups representing businesses and construction industries agreed to stay neutral on the bill, others representing businesses and communities along Interstate 70 and in northern Colorado opposed it.
Sandra Hagen Solin, representing the Northern Colorado Legislative Alliance, said the bill would remove an existing guaranteed, albeit fluctuating, funding source for transportation and replace it with a temporary one.
She and others said the issue should be studied further.
Rep. Frank McNulty, R-Highlands Ranch, echoed GOP sentiments on the committee, saying the bill was “gutting the long-term commitment we had for transportation.”
The committee approved the bill on a 6-5 vote, and it now must head to the House Appropriations Committee before it can go to the full House.
Tim Hoover: 303-954-1626 or thoover@denverpost.com
