RBC I The needs are growing while the revenue source is shrinking as Coloradans try to keep up with the demands of the state’s highways and bridges. At the same time, officials wrestling with the challenge face the larger challenge of deciding how highway funding can increase while also dealing with the demands of health and welfare, education and the law enforcement.
Over the past 20 years, Colorado’s population has increased 53 percent and traffic counts are up 57 percent; yet, the capacity of state roads has increased 2 percent, said Reeves Brown, director of the State Department of Local Affairs and a member of the TBD Colorado board. TBD is an acronym meaning “to be determined,” reflecting the organization’s mission to focus on whichever issues Coloradans care about the most. Brown and others presented results of research conducted earlier this year during CLUB 20’s annual fall meeting at Colorado Mesa University in Grand Junction Sept. 7-8.
To further complicate the issue, demographers predict Colorado’s population will increase more than 40 percent more by 2032 while funding through gas taxes could actually shrink. And the general public can be at a loss as to how to react in the midst of the other services it desires. For example, Medicaid costs consume 24 percent of the state budget and health care mandates lead officials to predict the percentage will continue to climb.
So where does transportation figure in the list of priorities determined by TBD Colorado?
That’s what TBD Colorado members Brown, Northwest Community College President Russ George and Colorado Transportation Commission member Doug Aden tried to determine via a series of meetings across the state last spring. From polling conducted at the meetings, home and community-based services for the elderly and disabled was the number one priority, while funding for rural roads ranked fifth. Road work ranked behind early childhood education and other issues. George suggested roads rank lower than other concerns because many people take roads for granted.
After determining citizens’ priorities, TBD officials asked them to determine priorities under constraints of the state budget. In other words, “What happens when we have to pay for it?” asked George.
Under the scenario, home-based health care rose in importance, while rural roads declined.
“That’s because home health care saves money,” said George.
And while funding roads can produce long-term economic benefits, voters can be less likely to understand the connection when they see the dollar figure for highways. That amount has shrunk to $1.2 billion for the current fiscal year.
Forty percent of the funds come from the federal government, said Aden. Another 33 percent comes from a highway users’ trust fund and about 11 percent comes from vehicle registration fees. While Club 20 officially opposes an increase in Colorado taxes apart from the gasoline tax, it also endorses efforts to examine various funding sources at the federal level—from the gasoline tax to vehicle user fees.
Colorado’s TABOR—an acronym for Taxpayers Bill of Rights—was approved by state voters in 1992 and ties state revenues and expenditures to a formula that allows those revenues to increase in relation to state population growth and the change in the Boulder-Denver Consumer Price Index. Any revenues collected above that permitted amount must be returned to taxpayers.
Proponents say the measure forces the state to live within its means, spending less than it collects in taxes and fees each year. The Colorado constitution echoes that theme, requiring state lawmakers to balance the state budget each year. TABOR also prohibits state or local government tax increases unless voters approve such increases, giving voters a direct voice in how much they pay in taxes.
Opponents of the measure say an unintended consequence is that TABOR harms the intent of a representative Republic, whereby elected politicians decide whether to raise taxes or borrow funds to pay for state services. Opponents also cite a so-called “ratcheting down” effect. Because each year’s allowable increase in state expenditures is tied to population growth and inflation, an economic downturn can lower the starting point for the following year’s expenditures. Additionally, opponents of TABOR say the measure hamstrings lawmakers who try to deal with a so-called perfect storm that happens during a downturn: state revenues can decline even as the demand for food stamps, housing aid and other services increases.
To make the issue even more complicated for the average voter, many politicians talk of their perceived need to reel in the combined influence of TABOR, the Gallagher Amendment, and Amendment 23. While TABOR can limit revenues the state spends, the Gallagher Amendment requires businesses to pay the majority of property taxes in Colorado and Amendment 23 requires at least a 5 percent annual increase in funding for K-12 public education in the state. The Gallagher Amendment is cited as a measure which discourages businesses from locating in Colorado, possibly reducing the number of jobs and subsequent tax revenue that comes from workers spending money.
The scenario leads to a consensus among Club 20 directors — new funding sources should be pursued to pay for roads.
“We need to find a sustainable funding source for our roads,” said Bonnie Petersen, executive director of CLUB 20.
Aden and others say it’s time to consider raising the gasoline tax, which Colorado hasn’t hiked since the early 1990s. There’s yet another wild card that could add fuel to the fire in the scenario. Due to federal guidelines calling for increased fuel efficiency by 2025, the average vehicle owner will buy less gasoline to drive the same number of miles as she does today.
The TBD panel also spent time on the health care issue, particularly because constituents ranked home health care as a high priority. All three men endorsed continued emphasis on education at all levels. The state projects a decline in the percentage of Colorado adults holding bachelor’s degrees over the next eight years. It also estimates one in three kindergarten students are unprepared to learn in school.
The survey took much time and travel across the state and TBD members think it was worth the effort. They plan to produce a report which they say can help Coloradans understand the complexities of choosing priorities with a limited budget.
“We have a more informed public as a result of this,” said George. “Clearly that has happened. Did we make a difference? Hard to know.”
He and other TBD members hope the survey and subsequent report will be reviewed by voters and become an important step in the journey of finding more money for roads and establishing budget priorities during complex and changing times.
Coloradans interested in trying their hand at making budget priorities can do so by logging on to www.backseatbudgeter.com. The web site allows users to see the impact of spending funds on one item while correspondingly decreasing funds in other area.
CLUB 20 is a coalition of businesses, individuals and local government organizations organized to help Western Coloradans to develop unified positions on issues of common concern and increasing the region’s voice at the state and federal legislative and business circles. Members from 22 counties in Western Colorado belong to CLUB 20.