DALLAS — Denver’s Regional Transportation District is considering asking voters for a 0.4% sales tax increase this year or next to complete the $6.7 billion FasTracks project currently under construction.
The funding proposal is one of three scenarios to cover a revenue shortfall for completing the ambitious project. FasTracks combines commuter and light rail with dedicated bus lanes and new stations using funding from public-private partnerships and federal grants.
Fearing that voters might shun such a large increase in the existing sales tax, which was approved in 2004, the RTD is also considering seeking a 0.2% tax hike in November, with the aim of getting as much as 90% of FasTracks built by 2022 and completing the full program by 2027.
The third option would be a 0.1% increase, allowing the district to build up to 81% of FasTracks by 2022, with completion by 2035.
The three scenarios were discussed at a FasTracks committee meeting of the RTD board Tuesday night.
Bill Van Meter, head of planning for the agency, said the Federal Transit Administration indicated the RTD could gain federal funding for another FasTracks rail line if it chooses the 0.2% or 0.1% tax hikes that would extend the completion date to 2019.
District officials expect to receive a $1 billion FTA grant for FasTracks trains to Denver International Airport and Wheat Ridge. Additional federal funding for another FasTracks project is considered unlikely before 2019.
The board will hear public opinion on the funding scenarios at its Jan. 25 meeting.
The RTD decided to postpone an election on the tax hike proposal in 2010 amid fervent anti-government rhetoric, heated congressional and statewide elections, and three ballot proposals to rein in state and local debt in Colorado.
Standard & Poor’s last year downgraded the district’s lease-revenue debt to A-minus from A-plus as it prepared to issue $310 million of certificates of participation.
Standard & Poor’s analyst David Hitchcock based the downgrade on “a significant increase in sales-tax-secured debt that has a prior lien on RTD’s primary source of revenue and an increase in lease-appropriation debt outstanding, as well as new RTD appropriation obligations for operations incurred as part of a concession agreement for RTD’s Eagle P3 FasTracks public-private partnership.”
The COPs are rated double-A minus by Moody’s Investors Service and Fitch Ratings, both with stable outlooks.