Colorado Capitol Report

Senate Finance Committee Kills Transportation Funding Bill

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Senate Finance Committee Kills Transportation Funding Bill

Yesterday afternoon, as widely expected, the Senate Finance Committee pounded the final nail into the coffin of HB-1242, perhaps the session’s signature piece of legislation that many—including CACI—had hoped would at long last tackle the state’s woefully underfunded system of roads and bridges that, according to the Colorado Department of Transportation (CDOT), needs $9 billion to bring it up to snuff.

The vote to kill the bill, which was sponsored by the presiding officers of the Democrat-controlled House and the Republican-controlled Senate and their respective transportation committee chairs, was a party-line 3-to-2 vote.  The Committee members are:

HB-1242 was intended to create a stable, 20-year plan for transportation funding by increasing the state sales tax by 0.5 percent to 3.4 percent, which would issue $3.5 billion in bonds to fund transportation projects.

Until Wednesday night, April 19th, Senator Tate’s undeclared position on HB-1242 had been the focus of proponents and opponents of the bill.  With the Senator’s decision to oppose the bill, the fate of HB-1242 was sealed.

In general, many Republican lawmakers have opposed increasing the state sales tax for long-term transportation funding without commensurate cuts to state spending that would direct funds to transportation.  Repeated efforts to institute such cuts during debate on the Long Bill, the state’s budget measure, were repulsed.

CACI response

The bill was the most important bill this session for CACI and the statewide business community that it represents.  On March 16th, the CACI Board of Directors voted to support HB-1242 as introduced.

“Despite the fate of HB-1242,” said Loren Furman, CACI Senior Vice President, State and Federal Relations, “the demise of the bill doesn’t change the fact that Colorado urgently needs to come up with a long-term source of funding for transportation.”

“Although no one denies that we have a transportation problem, reaching agreement on how to pay for transportation improvements is a very heavy lift,” Loren said, “Nonetheless, CACI members and all Coloradans deserve a functional transportation infrastructure.”

“While CACI is disappointed that the bill will not advance through the legislative process,” said CACI President Chuck Berry, “nevertheless, I want to highly commend CACI’s Loren Furman for the terrific work she did in support of improving Colorado’s transportation system.”

“Loren worked tirelessly over many weeks in a very challenging environment in this legislature, and she continuously advocated statewide business support for a better way to fund transportation modernization,” Berry said.

HB-1242 reflected bipartisan leadership advocacy

The Senate co-sponsors of the bill were Senate President Kevin Grantham (R-Canon City) and Senator Randy Baumgardner (R-Hot Sulfur Springs), who chairs the Senate Transportation Committee.

The bill was the product of more than half-a-year of negotiations between and Senator President Grantham and House Speaker Duran and interested organizations.

The bill’s House prime sponsors were Democrat House Speaker Crisanta Duran (Denver) and Representative Diane Mitsch Bush (D-Steamboat Springs), who chairs the House Transportation and Energy Committee.

The Senate’s prime co-sponsors issued the following statements after the bill had been torpedoed:

Senate President Grantham:

When we started down this road, my goal was to put a bipartisan transportation package before voters that would help Colorado catch up on a road modernization backlog that cries out for prompt but thoughtful action. And while that goal thus-far has proved elusive, just as I repeatedly warned it might, the debate this bill generated will move us closer to finding the ultimate answer by clarifying what the major sticking points are.

The 71st General Assembly won’t complete its work until May 2018, so we’ll keep working on the issue, through this session and next, unless something is put on the ballot in the meantime that can win voter support. While I’m disappointed by this particular vote, I remain confident that the work we did on this issue won’t go to waste and will move us closer than we were before to the fix we all seek.

Senator Baumgardner:

No one said this was a perfect solution, or that it would have been an easy, slam-dunk sell to voters, but I believe the good in this proposal outweighed the bad and that acting now is far better than continually kicking this can down the road, while the backlog of neglected road work grows worse. So I’m disappointed that voters won’t have their say, yay or nay, after having an opportunity to weigh the pros and cons of this proposal in its totality.

Other options

At this point, transportation funding advocates are faced with two options for progress this year:

  • SB-267
  • Citizen-initiated ballot proposal

A complicated measure, SB-267, the “Rural Sustainability” bill, would save rural hospitals from funding cuts while boosting funds for rural development and transportation.

SB-267 is co-sponsored in the Senate by Senator Lucia Guzman (D-Denver) and Senate President Pro Tem Jerry Sonnenberg (R-Sterling).

Hope that SB-267 will survive, however, is rapidly evaporating because of strong differences that have arisen among the Senate and House sponsors.

On Tuesday, April 11th, the Senate Finance Committee extensively amended and approved by a 4-1 bipartisan vote the 57-page bill.  The Committee Chair, Senator Tim Neville (R-Littleton), was the lone “no’ vote.

Since then, the bill has languished in the Senate Appropriations Committee.

CACI supports SB-267 as introduced because CACI last year endorsed HB-1420, which would have converted the hospital provider fee to a state enterprise.  HB-1420 died at the end of the 2016 session in the Senate Finance Committee.

The salient provisions of SB-267 are laid out in the bill’s second fiscal note:

  • repeals the existing Hospital Provider Fee, creates the Colorado Healthcare Affordability and Sustainability Enterprise (enterprise) to administer a similar new fee, and makes an adjustment to reduce the state TABOR limit (Referendum C cap);
  • beginning in FY 2018-19, authorizes the state to execute lease-purchase agreements on existing facilities and credits the proceeds of such agreements to fund transportation, capital construction, and controlled maintenance projects;
  • repeals the current General Fund transfers to the Highway Users Tax Fund (HUTF) under Senate Bill 17-262 and instead transfers this money to the State Public School Fund for allocation to rural and small rural school districts;
  • requires executive departments to submit FY 2018-19 budget requests to the Office of State Planning and Budgeting (OSPB) that are 2 percent lower than the amounts they receive for FY 2017-18;
  • allows health care providers that are not enrolled in Medicaid to bill Medicaid patients for health care services, provided that the provider and patient enter into a written contract; and
  • conditional on enactment of the federal Advancing Care for Exceptional Kids Act (ACE Kids Act), requires the Department of Health Care Policy and Financing (HCPF) to seek federal waivers necessary to fund an enhanced pediatric health home for children with complex medical conditions.

The final version of the HB-1242   

The last fiscal note, which was issued last Thursday, April 20th and is 13 pages long, contains an analysis of the final version of the bill.  The final version of the bill on the legislature’s Web site, however, does not include the amendments of the Senate Transportation Committee.

On Tuesday, April 11th, the Senate Transportation Committee amended and approved HB-1242.  The most significant of the 13 amendments proposed by Senator Grantham and approved by the Senate Transportation Committee included the following:

  • Reducing the proposed increase in the state sales tax from 3.62 percent to 3.4 percent (the current tax is 2.9 percent).
  • Committing General Fund support of $100 million annually for two decades for future bond payments to pay for about $3.5 billion in projects to expand highways.
  • Ensuring that the Colorado Department of Transportation (CDOT) receives a set percentage of the above funding stream instead of a fixed $375 million annually that was in the bill that came to the Transportation Committee.
  • Creating a new, multi-modal transportation grant fund.
  • Reforming the contracting practices of the Colorado Department of Transportation (CDOT) to open up the bidding process and make it more transparent.

For more information about HB-1242, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.

For news media coverage and additional information, read:

Transportation-funding bill runs out of gas in Colorado Legislature,” by Ed Sealover, The Denver Business Journal, April 25th.

Transportation tax hike proposal reached end of the road in Colorado,” by John Frank, The Denver Post, April 25th.

Senate Committee Endorses “Rural Sustainability’ Bill,” CACI Colorado Capitol Report, April 13th.