Colorado’s top lawmakers want to ask voters to increase the state sales tax by less than a penny on a dollar to support spending as much as $3.5 billion to improve roads and traffic congestion.
The much-anticipated legislation, introduced late Wednesday, represents a breakthrough after months of difficult negotiations between Democratic and Republican leaders to address what both parties agree is the General Assembly’s top priority.
House Bill 1242 — sponsored by Democratic House Speaker Crisanta Duran and Republican Senate President Kevin Grantham — would increase the statewide sales tax to 3.52 percent from 2.9 percent. If approved by the voters in November, the tax hike would start in January 2018 and remain in place for 20 years.
“If we are really going to deliver results to the people of Colorado, we need everybody at the table — Republicans and Democrats. I think this is an example of that,” Duran, of Denver, said in an interview.
The legislation, details of which were first reported by The Denver Post, also would redirect $50 million in existing revenue to roads and decrease annual vehicle registration fees by $75 million a year. The total package would generate an estimated $677 million a year for transportation.
The registration fee on small cars would decrease from $23 to $9, while the rate on motorcycles would fall from $16 to $6. The levy on larger passenger vehicles goes from $28 to $11.
The deal represents a compromise on both sides: It pulls from existing revenues, a point Democrats dislike, and it represents an increase in total revenue, a problem for conservatives.
Gov. John Hickenlooper called for a voter referendum in his State of the State address in January and continued to express optimism Wednesday about the potential for a consensus bill.
“I’m open to pretty much any way to fund it,” he told reporters, emphasizing that transportation is not a partisan issue.
The Colorado Department of Transportation has identified $9 billion in need for the state’s transportation system, which is suffering from a population boom and limited maintenance dollars.
The top priorities are the expansion of Interstate 70 through the mountains and widening of Interstate 25 north and south of Denver.
The $677 million in total transportation dollars outlined in the legislation would split into three buckets.
The majority of the money — $350 million — would go toward a payments on a potential $3.5 billion bond package.
The remaining share would be split with 70 percent to local governments for road improvements and 30 percent earmarked for transit-oriented projects.
The local government share is projected to reach near $216 million in the first year. Another portion, estimated at $92 million, would go to local areas in the form of matching grants awarded by a new commission created in the legislation.
“It’s statewide. There’s something in here for everyone,” said Rep. Diane Mitsch Bush, a D-Steamboat Springs and the House transportation chairwoman.
“The deal, as we understand it, attempts to strike the right balance between the priorities of the leadership in both houses while considering what might be viable with voters,” said Sandra Hagen Solin, who is with Fix Colorado Roads.
In her interview with The Post, Duran emphasized that the legislation includes provisions to make the spending transparent to voters, including a public website to track the spending and a committee to oversee the bonding.
Not all applauded the compromise plan. Americans for Prosperity, a conservative organization that blocked legislative attempts in recent years to increase spending, noted how it represents a tax hike — a 21 percent increase in the state sales tax.