Transportation

Key Responsibilities

CDOT's official mission is "To provide the best multi-modal transportation system for Colorado that most effectively moves people, goods, and information." To do that, the Department:

• Builds, operates and maintains operates Colorado's highway system

• 9,134 miles of highway
• 3,775 bridges
• 28 billion miles/year of vehicle travel

• Helps local local transit systems
• Manages the state’s Highway Safety Plan, including:
• combating drunk driving
• encouraging people to wear seatbelts
• enforcing speed limits
• reducing traffic deaths
• Maintains and manages some funding of the statewide aviation system
• supports aviation safety at local airports
• distributes aviation fuel tax revenue
• makes grants to local airports
  

Factors Driving the Transportation Budget

Colorado's budget for transportation doesn't even come close to meeting the state's transportation needs. For the period between 2007 and 2035, CDOT expects to have $123 billion for transportation. To sustain the current level of service during that period, CDOT says, would cost at least $176 billion. That leaves us $53 billion short of maintaining the current system over the next 30 years.

There are a few key factors that contribute to the shortfall:

• The fuel taxes Colorado historically relied on to pay for transportation are no longer keeping pace with our transportation funding needs.
• Starting in 2000, the state sold $1.5 billion in bonds to pay for TREX and other transportation projects; we're now spending a lot of our transportation money to pay off the bonds
• The legislature in 1999 and 2000 cut taxes that would have brought in revenue to fund transportation
• The federal government is cutting the amount of money it distributes to states
  

Fuel Taxes

For decades Colorado (and the federal government) paid for the transportation using revenue from fuels taxes. It was essentially a user fee, and it worked pretty well: as people drove more, they bought more fuel, which means they paid more fuel tax, which paid for expanding and maintaining the system. Then we got green and started driving fuel-efficient vehicles. That meant people could drive more and buy less fuel.

Keep in mind that our fuel taxes are excise taxes; you pay a fixed amount of tax per gallon (e.g. 22 cents per gallon of gasoline), not a percentage of the price like a sales tax. That means the state collects the same amount of tax on a gallon of gas whether that gallon costs $1.50 or $3.50.

The result of all that has undermined our user-fee-like system for funding the transportation system. (And it's had the same effect on federal transportation funding, but we'll get to that later).

TRANs Bonds

In 1999 the state came up with a plan to quickly complete some "strategic" transportation projects across the state, the so-called 7th Pot projects. It asked for and got voter approval to sell $1.5 billion worth of Transportation Revenue Anticipation Notes (TRANs). The plan was to pay off the bonds using anticipated revenue from the federal government and SB1. Selling the bonds swelled transportation revenue for a few years and let the state complete some big projects like TREX south of Denver.

In 2005 transportation funding took a double hit: all the bonds had been sold, cutting off that stream of revenue, and the state had to start making payments to bond holders. That cut the amount of money we had for transportation from $1.2 billion to $800 million.

We'll be making payments of about $168 million a year through FY 2016-17. The revenue the legislature anticipated would be available to pay off the bonds isn't what they projected. For the next few years we probably won't have any SB1 revenue, and the federal government is cutting its distribution to the state.

Tax Cuts

In 1997 the legislature passed SB97-1, know known as SB1, divert about $250 million a year to transportation. The money was supposed to be above the 6% GF spending limit and below the TABOR revenue limit.

During the 1999 and 2000 sessions the legislature passed 24 bills permanently cutting taxes. They totaled up to about $550 million at the time, which would be more than $850 million this year. The legislature's intention was to eliminate the TABOR surplus (above the TABOR revenue limit), but presumably not the money that flowed into SB1 and HB1310. Just after the tax cuts, the economy dipped. The combination of the tax cuts, the recession and TABOR ratcheted state revenue down by about a billion dollars.

That's money that would be flowing through SB1 and into transportation; it's also part of the money the legislature anticipated would be available to pay back the TRANSs bonds.

Federal Funding Cuts

The federal government is cutting it's transportation funding, including money it indicated it would distribute to Colorado. They're having the same problem with fuels taxes that we are. And they're not managing it any better. In fact, the last time Congress reauthorized the bill that distributes money to state, the sponsors missed the deadline by two years. By then, they were so desperate to pass something, that thay promised all kinds of projects to anyone who would vote "yes." (Alaska's "bridge to nowhere" was just the tip of the iceberg). Within a couple of years it became clear that Congress has promised more than the federal highway fund could afford. Now