Colorado Senate President Kevin Grantham, R-Canon City, said he would be willing to consider a sales tax increase, or other revenue source, to fund a bond package that would provide around $3.5 billion for needed transportation and infrastructure projects.

DALLAS – After failing in the previous session to pass a long-term highway funding bill, the Colorado General Assembly is expected to consider a $3.5 billion transportation and infrastructure bond measure that could be backed by sales tax.

The 71st General Assembly that convenes Wednesday in Denver will be politically split, with Republicans in control of the Senate and Democrats running the House.

Incoming Senate President Kevin Grantham, R-Canon City, said he would be willing to consider a sales tax increase, or other revenue source, to fund a bond package that would provide around $3.5 billion for needed transportation and infrastructure projects. House Speaker Crisanta Duran, D-Denver, has also said she is willing to consider the measure.

Another option could be applying debt service on a 1999 bond issue due to be paid off this year to a new series, according to one lobbying organization. Annual debt service for the 1999 bonds is $167 million, according to Sandra Solin, lobbyist for the firm Capitol Solutions and head of the Fix Our Roads coalition that is promoting the funding.

Colorado needs nearly $9 billion of revenue to meet its transportation infrastructure needs over the next 10 years, according to the Colorado Department of Transportation.

A bill authorizing $3.5 billion of tax revenue anticipation notes for highway construction failed to win passing in the last days of the 2016 legislative session.

Under Democratic Gov. John Hickenlooper's budget proposal for the next two years, transportation expenditures from the general fund would fall by 41% to help close a $500 million revenue gap.

The $28.5 billion executive budget sent by the governor to lawmakers on Nov. 1 would reduce statutory transfers from the general fund to roads and highways by a total of $109 million, with a $79 million reduction in fiscal 2017 and $30.3 million in fiscal 2018.

Senate Bill 228 adopted by the legislature in 2009 created a formula to shift between $100 million and $200 million per year from the general fund to the Highway Users Trust Fund unless lawmakers object.

The state transportation fund had been expected to receive transfers of approximately $158 million in fiscal 2017, which began June 1, and $109 million in fiscal 2018.

However, Hickenlooper proposes moving half of the scheduled 2017 transfer into the 2018 budget and eliminating all of the potential 2018 transfer.

The $109 million cut in spending could delay some highway projects, according to CDOT.

In overall spending, Hickenlooper's budget proposal represents a 3.3% increase in spending over the current year's expected budget.

"Colorado's economy continues to grow, though more slowly than in recent years," Hickenlooper said. "Within the confines of the competing requirements of the State Constitution and formulas in current law, this budget prioritizes the fiscal priorities of the state with a modest 3.3% increase."

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