DALLAS — Colorado will need an additional $1.5 billion per year to invest in transportation infrastructure in the face of deteriorating roadways and increasing use, a panel appointed by Gov. Bill Ritter Jr. reports.
Adding the new revenue would more than double the $1 billion that Colorado currently spends on transportation each year. The additional revenue could be leveraged through bond issues to finance new construction, officials said.
With fuel taxes falling short of funding needs, the Transportation Finance and Implementation Panel recommended new revenue sources in addition to a 13-cents-per-gallon motor fuel tax increase.
Among the recommendations is a $100 average increase in motor vehicle registration fees, an amount that could provide $500 million per year compared to $351 million from the 13-cent-fuel tax hike.
Also recommended were a new daily visitor fee of $6 that would raise $240 million per year, a 0.35-cent sales and use tax increase that would raise $312 million and a 1.7% increase in the state severance tax that would produce $96 million, according to the report.
The idea of a $6 visitor fee that would be applied to car rentals or hotel stays, drew an immediate challenge from the National Business Travel Association, which met with Ritter Wednesday. The increase would make Colorado’s rental car fee the highest in the nation, the association said.
“The majority of NBTA member companies spend at least half of their car rental budgets in their home markets,” said Bill Connors, executive director of the association. “If the state of Colorado starts charging $6 per day on car rentals and hotel rooms, it will be pulling money straight from the bottom lines of the companies doing business in Colorado.”
Ritter, a Democrat, said that he has no plans to call for an election to raise the fuel taxes this year as voters choose a new president and members of Congress. Denver is hosting the Democratic National Convention this summer.
Ritter appeared more receptive to the increase in registration fees, saying that the legislature currently in session could raise the fees without voter approval.
“We cannot look at the situation and argue that we can do nothing about it and it’s going to be OK,” Ritter said.
Colorado has relied on motor fuel-tax revenues for highway construction for 75 years, but the revenues have declined for two straight years, as vehicles have become more fuel efficient. But the panel cited reports that if money for transportation does not increase, the number of bridges in good or fair condition will decrease 38% statewide by 2035 and the percentage of roads in good condition will sink to 25% by that year.
Colorado levies a tax of 22.5 cents per gallon on gasoline and 20.5 cents on diesel. The federal tax is 18.4 cents per gallon on gasoline and 24.4 cents on diesel. A mid-size car driven 15,000 miles a year pays about $132 in state gas taxes and $110 in federal taxes, the report says.
Colorado has not raised fuel taxes in 17 years as construction inflation has risen 6.4% per year, the report says.
“Since 1997, during good economic times, the Legislature has allocated money from the state’s general fund to supplement gas tax revenue,” the report notes. “But this is a sporadic and unpredictable source of funding for transportation.”