Opinion: Will cities and counties really get their Proposition 110 money?


Last Friday morning, I was asked by some folks to take a look at the details of Proposition 110, the 20-year 0.62 percent state sales tax increase that would fund transportation projects.
In the portions of the proposed law that would give counties and cities 40 percent of the revenues (with half going to each) I noticed the following phrase, “(1) After paying the costs of the Colorado state patrol and any other costs of the department (CDOT) exclusive of highway construction, highway improvements, or highway maintenance, that are appropriated by the general assembly …,” followed by the allocation rules for the counties and cities. So it’s clear, this phrase is embedded in the current statutes, and the drafters of Proposition 110 simply included it and made it apply to Proposition 110’s revenues.
Then I looked at the portion of Proposition 110 that allocated 45 percent of the proceeds to the state. I was surprised to find that this phrase was specifically removed. And it was not referenced at all in the portion that allocates 15 percent to multi-modal projects. So the drafters only applied it to the county and city portions. They could have simply removed this phrase from the county and city portions, or just added some language like, “no CSP costs or CDOT administration costs shall be paid from the funds allocated to cities and counties.” But they chose not to.
So I looked up these numbers. This year’s CSP budget is about $156 million. The projected annual CDOT budget for program delivery and services — the part that is apparently not “construction, improvements, or maintenance” — is about $90 million. That’s a total of $246 million.
The first year’s projected revenues from Proposition 110 are about $767 million, so the cities’ and counties’ 40 percent share would be about $307 million. Then, based on Proposition 110’s plain language (which presumably would preempt existing laws), all of this $246 million could come out of the cities’ and counties’ share. This deduction would reduce their net share to only $61 million, about 20 percent of what they were led to expect.
Since I raised the issue a few days ago with some state legislators and city and county officials, I’ve received some interesting third-party feedback, including a “CDOT analysis” of my concerns that was apparently written within a few hours of my raising these issues.
Makes you wonder. No one disputed the language, but they did offer various arguments and workarounds to this situation. I also note that the Blue Book completely missed this, but it also failed to mention other items, like the matching funds requirement for the 15 percent multi-modal money.
Of course there are other significant issues with Proposition 110. It charges sales tax rather than user-type fees, like gas tax, tolls, parking fees, etc., which would charge directly those who use the facilities where most of the money will be spent. (Proposition 110 actually states that most of the state and local money will be spent on highway projects.) Also, sales tax is an inherently regressive tax, and puts a burden on those less able to pay. And, from a local perspective, Boulder’s sales tax rate will go up to almost 9.5 percent, further dampening people’s enthusiasm for shopping here.
But the biggest flaw with Proposition 110 is that the vast majority of the unmet transportation needs are associated with demands created by new development. If the legislature would ever get it together to impose development impact fees, it could easily raise $1 billion a year for statewide transportation alone. That would free up far more money than Proposition 110 to do bike paths, transit improvements, road repairs, etc. — the very stuff people are hoping that Proposition 110 will fund.
Impact fees would do this with no tax increase. And these fees would come from those who are making excessive profits by avoiding paying for the costs they impose on the rest of us.
I think that it’s my obligation, once I discovered this error, to point it out to the Camera’s readers. And I fully expect that the Proposition 110 proponents will respond to my points about their drafting flaws. Then you can make up your own mind about this, but at least you will know the situation. By the way, you can find all the legal language in the Blue Book. Although it takes more time to read than the summary, you get a much better picture of all the details, which, frankly, would have been better left to the legislature.


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