Prop 110 and Prop 109 approach funding transportation needs in very different ways.
Prop 110 proposes an increase in the state sales tax from 2.9% to 3.52% (a 21% increase) for 20 years beginning in 2019. The annual projected revenue increase is $766.7 million. The new revenue would be distributed according to the formula: 45% state projects, 40% local projects, and 15% multimodal transportation, such as buses, light rail, bike paths and sidewalks.
To pay for large projects, the state would be authorized to borrow up to $6 billion. The maximum total repayment of $9.4B is less than the projected increased sales tax revenue.
A bit over 10% of the state budget goes to transportation funds coming from 4 sources:
$526.8M federal gas tax
$339.5M registration fees
$321.6M state gas tax
$241.8M other – federal grants, tolls, etc
Recommendation: leaning no/against
The proponents’ argument that, with a sales tax, “the 39.7 million visitors who use our roads pay their share,” is not a convincing argument. Most of the regressive sales tax will be paid by Coloradans. This proposed sales tax increase won’t even apply to gasoline purchases made by visitors.
A more sensible solution would be to raise the state gas tax incrementally and permanently over the coming years. Such a change would connect driving on our roads more directly with transportation revenue. Incremental changes would give drivers some time to adjust their behavior and reduce the effect on their pocketbook. Reducing vehicle miles per passenger would decrease the wear and tear on our roads. Reportedly, polling found a gas tax increase to be unpalatable to voters, but perhaps an education campaign could have swayed voters.
Colorado set the current state gas tax at 22 cents per gallon back in 1991. Fuel efficiency has gone way up since 1991, but there are still enough gas-powered vehicles on the road to warrant an increase that would be paid partially by motoring tourists. For instance, increase the state gas tax by 5 cents per gallon annually until we are at 42 cents per gallon. Exempt gasoline for public buses from the increased gas tax.
Meanwhile, increase the tax on vehicle sales and/or the fees on vehicle title transfers. Perhaps electric and hybrid car owners should pay a higher tax or fees since they are not impacted as much by a change in gas taxes, but they still drive on our roads. Once again, exempt public buses from the increase.
As a tax increase, my substitute proposal would require a vote of the people. If neither Prop 109 nor Prop 110 pass, perhaps the legislature would consider this different tactic, although the current plan is Senate Bill 18-001 which would ask on the 2019 ballot for bonding authority of $2.33 billion to be repaid from the general fund.
I believe transportation projects should prioritize safety. We don’t want any bridges falling down because of poor maintenance or construction, like in Minnesota (2007) and Florida (2018). The second priority should be reducing damage to tires and suspension due to rough roads and thereby reducing vehicle repair costs. The third priority should be reducing traffic congestion.
Most people will vote one way on Prop 110 and another way on Prop 109, but voting against both is also an option. Voting for both is not recommended as noted in this blog’s Prop 109 comments. Neither measure will pass without a majority of the votes cast for that measure.
Website for the Yes Side – Let’s Go Colorado
https://www.letsgocolorado.com/
Website for the No Side – Fix Our Damn Roads
http://fixourdamnroads.com/
Approved Ballot Language
Proposition 110 (STATUTORY)
SHALL STATE TAXES BE INCREASED $766,700,000 ANNUALLY FOR A TWENTY-YEAR PERIOD, AND STATE DEBT SHALL BE INCREASED $6,000,000,000 WITH A MAXIMUM REPAYMENT COST OF $9,400,000,000, TO PAY FOR STATE AND LOCAL TRANSPORTATION PROJECTS, AND, IN CONNECTION THEREWITH, CHANGING THE COLORADO REVISED STATUTES TO: 1) INCREASE THE STATE SALES AND USE TAX RATE BY 0.62% BEGINNING JANUARY 1, 2019; REQUIRING 45% OF THE NEW REVENUE TO FUND STATE TRANSPORTATION SAFETY, MAINTENANCE, AND CONGESTION RELATED PROJECTS, 40% TO FUND MUNICIPAL AND COUNTY TRANSPORTATION PROJECTS, AND 15% TO FUND MULTIMODAL TRANSPORTATION PROJECTS, INCLUDING BIKE, PEDESTRIAN, AND TRANSIT INFRASTRUCTURE; 2) AUTHORIZE THE ISSUANCE OF ADDITIONAL TRANSPORTATION REVENUE ANTICIPATION NOTES TO FUND PRIORITY STATE TRANSPORTATION MAINTENANCE AND CONSTRUCTION PROJECTS, INCLUDING MULTIMODAL CAPITAL PROJECTS; AND 3) PROVIDE THAT ALL REVENUE RESULTING FROM THE TAX RATE INCREASE AND PROCEEDS FROM ISSUANCE OF REVENUE ANTICIPATION NOTES ARE VOTER-APPROVED REVENUE CHANGES EXEMPT FROM ANY STATE OR LOCAL REVENUE, SPENDING, OR OTHER LIMITATIONS IN LAW?
YES/FOR _______
NO/AGAINST _________
Prop 110 initiative language filed with the Secretary of State
http://www.sos.state.co.us/pubs/elections/Initiatives/titleBoard/filings/2017-2018/153Final.pdf
Prop 110 proposes an increase in the state sales tax from 2.9% to 3.52% (a 21% increase) for 20 years beginning in 2019. The annual projected revenue increase is $766.7 million. The new revenue would be distributed according to the formula: 45% state projects, 40% local projects, and 15% multimodal transportation, such as buses, light rail, bike paths and sidewalks.
To pay for large projects, the state would be authorized to borrow up to $6 billion. The maximum total repayment of $9.4B is less than the projected increased sales tax revenue.
A bit over 10% of the state budget goes to transportation funds coming from 4 sources:
$526.8M federal gas tax
$339.5M registration fees
$321.6M state gas tax
$241.8M other – federal grants, tolls, etc
Recommendation: leaning no/against
The proponents’ argument that, with a sales tax, “the 39.7 million visitors who use our roads pay their share,” is not a convincing argument. Most of the regressive sales tax will be paid by Coloradans. This proposed sales tax increase won’t even apply to gasoline purchases made by visitors.
A more sensible solution would be to raise the state gas tax incrementally and permanently over the coming years. Such a change would connect driving on our roads more directly with transportation revenue. Incremental changes would give drivers some time to adjust their behavior and reduce the effect on their pocketbook. Reducing vehicle miles per passenger would decrease the wear and tear on our roads. Reportedly, polling found a gas tax increase to be unpalatable to voters, but perhaps an education campaign could have swayed voters.
Colorado set the current state gas tax at 22 cents per gallon back in 1991. Fuel efficiency has gone way up since 1991, but there are still enough gas-powered vehicles on the road to warrant an increase that would be paid partially by motoring tourists. For instance, increase the state gas tax by 5 cents per gallon annually until we are at 42 cents per gallon. Exempt gasoline for public buses from the increased gas tax.
Meanwhile, increase the tax on vehicle sales and/or the fees on vehicle title transfers. Perhaps electric and hybrid car owners should pay a higher tax or fees since they are not impacted as much by a change in gas taxes, but they still drive on our roads. Once again, exempt public buses from the increase.
As a tax increase, my substitute proposal would require a vote of the people. If neither Prop 109 nor Prop 110 pass, perhaps the legislature would consider this different tactic, although the current plan is Senate Bill 18-001 which would ask on the 2019 ballot for bonding authority of $2.33 billion to be repaid from the general fund.
I believe transportation projects should prioritize safety. We don’t want any bridges falling down because of poor maintenance or construction, like in Minnesota (2007) and Florida (2018). The second priority should be reducing damage to tires and suspension due to rough roads and thereby reducing vehicle repair costs. The third priority should be reducing traffic congestion.
Most people will vote one way on Prop 110 and another way on Prop 109, but voting against both is also an option. Voting for both is not recommended as noted in this blog’s Prop 109 comments. Neither measure will pass without a majority of the votes cast for that measure.
Website for the Yes Side – Let’s Go Colorado
https://www.letsgocolorado.com/
Website for the No Side – Fix Our Damn Roads
http://fixourdamnroads.com/
Approved Ballot Language
Proposition 110 (STATUTORY)
SHALL STATE TAXES BE INCREASED $766,700,000 ANNUALLY FOR A TWENTY-YEAR PERIOD, AND STATE DEBT SHALL BE INCREASED $6,000,000,000 WITH A MAXIMUM REPAYMENT COST OF $9,400,000,000, TO PAY FOR STATE AND LOCAL TRANSPORTATION PROJECTS, AND, IN CONNECTION THEREWITH, CHANGING THE COLORADO REVISED STATUTES TO: 1) INCREASE THE STATE SALES AND USE TAX RATE BY 0.62% BEGINNING JANUARY 1, 2019; REQUIRING 45% OF THE NEW REVENUE TO FUND STATE TRANSPORTATION SAFETY, MAINTENANCE, AND CONGESTION RELATED PROJECTS, 40% TO FUND MUNICIPAL AND COUNTY TRANSPORTATION PROJECTS, AND 15% TO FUND MULTIMODAL TRANSPORTATION PROJECTS, INCLUDING BIKE, PEDESTRIAN, AND TRANSIT INFRASTRUCTURE; 2) AUTHORIZE THE ISSUANCE OF ADDITIONAL TRANSPORTATION REVENUE ANTICIPATION NOTES TO FUND PRIORITY STATE TRANSPORTATION MAINTENANCE AND CONSTRUCTION PROJECTS, INCLUDING MULTIMODAL CAPITAL PROJECTS; AND 3) PROVIDE THAT ALL REVENUE RESULTING FROM THE TAX RATE INCREASE AND PROCEEDS FROM ISSUANCE OF REVENUE ANTICIPATION NOTES ARE VOTER-APPROVED REVENUE CHANGES EXEMPT FROM ANY STATE OR LOCAL REVENUE, SPENDING, OR OTHER LIMITATIONS IN LAW?
YES/FOR _______
NO/AGAINST _________
Prop 110 initiative language filed with the Secretary of State
http://www.sos.state.co.us/pubs/elections/Initiatives/titleBoard/filings/2017-2018/153Final.pdf
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