Vail council members question possible state sales tax for transportation
Where are we?
The Colorado Senate on Thursday, April 5 passed a version of a $28.9 billion state budget for the coming fiscal year. A similar version has passed the Colorado House of Representatives. A conference committee will now hammer out a final version of the bill.
EAGLE COUNTY — Everyone who drives in Colorado knows our roads need work, and lots of it. But just how to pay for that work has been a problem that’s taken years to solve.
A partial solution may come in the next state budget. Members of the Colorado Legislature seem poised to pass a bill that provides $495 million for transportation spending in the next fiscal year. After that, voters may be asked for a more stable funding source in the form of a statewide sales tax increase.
State Senator Kerry Donovan, a Democrat from Eagle County, said in a phone conversation that this year’s one-time funding boost will be helpful, but not enough.
“The numbers needed just for maintenance are staggering,” Donovan said. Add in needed new projects, and the numbers get very large.
The Colorado Department of Transportation estimates a 25-year shortfall of roughly $25 billion for those projects.
Simply no money
Donovan said there’s simply no money in the state’s general fund for that additional spending.
And, while the state’s gas tax hasn’t been increased since 1991, that’s also an inadequate source of funding.
At a meeting on Tuesday, April 3, the Vail Town Council heard a report from Sam Mamet, director of the Colorado Municipal League. Part of that group’s job is lobbying the legislature and monitoring proposed bills.
Mamet told council members that a gas tax increase “isn’t feasible right now.”
An on-line fact sheet from CDOT notes that while there are more vehicles on the roads, those vehicles are more efficient. Future fuel economy standards means cars will become more efficient still over the coming years.
Mamet said that leaves a sales tax — which must be approved by voters — as one of the few long-term answers. That’s going to be complicated, too, he added.
“This is a difficult issue for municipalities,” Mamet said. That’s especially true for mountain resort communities.
Vail Town Council member Jenn Bruno said an increase in the state’s sales tax rate — 2.9 percent — could take future options away from Vail and other towns. And, she added, there could be resistance to a measure seen as making the entire state responsible for transportation funding focused on the Denver metropolitan area.
Mamet said no municipality is satisfied with the distribution of state money.
“On the Front Range, it’s thought (the Western Slope) gets more than we do,” he said.
Vail Mayor Dave Chapin said the idea of a statewide sales tax has been discussed at meetings of the Colorado Association of Ski Towns. Chapin said representatives there were concerned about the prospect of a statewide tax pushing local total rates above 10 percent.
A 0.5 percent boost in the state’s sales tax would push Vail’s lodging tax rate past the 10 percent mark.
Donovan said a possible ballot initiative is likely to come from the state’s business interests. That initiative will require a petition drive before finding a spot on the 2018 ballot.
If there is a ballot issue, then Donovan said she believes “people need to make up their own minds.” A former member of the Vail Town Council, Donovan said she understands the concerns about the perception of high tax rates increasing vacation costs.
But, she said, “It’s up to citizens to make that choice.”
Mamet told current Vail council members that there aren’t many good choices when it comes to boosting the state’s transportation spending.
“The logical place to look is the sales tax — that’s why this is on the table,” he said.
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930 and email@example.com.