Sales tax on gas one option to fund roads, Ritter advised
$3 a gallon would be $3.09 with voters' approval
Kevin Flynn, Rocky Mountain News
Wednesday, August 29, 2007
Colorado could gain nearly $13 billion for highway projects over a 27-year period if it persuades voters to remove the exemption for gasoline from the state gas tax.
An advisory committee to Gov. Bill Ritter's task force that is looking for new ways to fund transportation in the state discussed several taxes on Tuesday as it tried to wrap up its study of revenue options.
Gasoline is exempt from the state's 2.9 percent sales tax. However, like nearly all states, Colorado levies a per-gallon excise tax on gasoline that last was raised in 1991 to 22 cents.
A big reason for the gap between the state's transportation needs and money to pay for them is that the per-gallon tax doesn't keep up with inflation. Ritter's panel is supposed to come up with a recommendation for new financing methods by November, and it wants the advisory panel to finish evaluating the options by Sept. 25.
With gas at $3 per gallon, the state sales tax would add nine cents per gallon to the cost.
Among other things the panel has discussed are higher auto registration fees, an increase in the state income tax and a hike in the per-gallon tax. Still to be examined are tolls, new car fees, impact fees and hikes in fines for traffic violations.
Experts told the panel on Tuesday that whatever solution they propose - including talk of privatization of transportation facilities - it should be geared to keep up with inflation and a growing economy.
Projects quickly become unfeasible because of recent sharp inflation in heavy construction.
"This is one of the bad things about the world economy," Ron Marino of Citigroup told the committee. "There's only so much steel, concrete and aggregate to be produced."
He advised members to use the construction cost index, an annual measure of jumps in the price of building, rather than the consumer price index, which has grown more slowly.
"If you don't, you're going to be right back in the hole," Marino said.
The panel is looking at target amounts for six different levels of new annual funding, and evaluating the mix of fees, taxes, cuts and other measures to generate those amounts.
The six levels start at $340 million a year to provide basic repaving and bridge maintenance that has suffered for lack of funding.
They step up to include more and more projects, all the way to the highest figure of $3.6 billion a year, the amount needed to do all maintenance, bridge replacement, congestion relief, construction of local roads, aviation and transit projects on state and local drawing boards through 2030.
Officials say the top figure may be unrealistic from a political standpoint with voters, but they want to make sure they've looked at everything before coming up with a recommendation for Ritter.
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