Colorado Capitol Report

In this Capitol Report:

• Senate Republicans’ Transportation Bill Jumps Second Hurdle
• CACI's Dan Pilcher Named Co-Chair of the Council of State Chambers Business Operations Committee
• Kathleen Staks, Executive Director of the Colorado Energy Office, Addressed CACI Energy and Environment Council
• CACI Launches Its 5th Year of the EXECs Advocacy Program
• CACI Day at the Capitol
• Support CACI’s Golf Tournament-Sponsorships Now Available
• CACI's Legislative Agenda

Senate Republicans’ Transportation Bill Jumps Second Hurdle

Yesterday, the Senate Finance Committee on a four-to-one vote endorsed SB-1, the majority Senate Republicans’ signature transportation funding bill and sent it to the Senate Appropriations Committee.

The Committee’s three Republicans—Senators Tim Neville, Jim Smallwood and Jack Tate–voted for the bill as did the Senate’s sole unaffiliated Senator, Cheri Jahn (Wheat Ridge), a former Democrat.  The lone vote against the bill was cast by Democrat Lois Court (Denver).

In brief, the bill would:

• Set aside 10 percent of the state’s sales-and-use tax revenue, which would be about $350 million annually, for transportation funding.
• Of this amount, $100 million would go to the Colorado Department of Transportation (CDOT) for maintenance and expansion of highways.
• Of the other $250 million, it would go for the repayment of up to $3.5 billion in state-issued bonds.
• Voters this November would need to approve the issuance of the bonds.

The bond-generated money would go for such major projects as expanding I-25 between Monument Hill and Castle Rock; expanding I-25 in northern Colorado; and expanding I-70 west in the mountains.

The bill is co-sponsored by Senator Randy Baumgardner (R-White Sulfur Springs) and Senator John Cooke (R-Fort Collins). 

CACI’s Position and Role

Although CACI supports SB-1 as it moves through the legislative process, the bill–if approved by the legislature–will have to go to the voters in November for their approval for the State to issue bonds as specified in the bill.  Consequently, if the legislature passes the proposal, the CACI Board of Directors will then examine the final referred measure to determine its position.

CACI is working diligently with both House and Senate Republicans and Democrats as well as other interest groups to arrive at a consensus solution that can provide a long-term, sustainable solution to the transportation funding shortfall within the context of the unexpected revenue boom of $1 billion this fiscal year and next because of the effect of the Federal tax act on Colorado’s tax system and of the state’s strong economy.

“CACI supports spending as much of the newly reported general funds revenue as possible for the state’s transportation needs,” said Chuck Berry, CACI President, “Polling shows that the Number One concern of Coloradans is with congestion and other transportation capacity improvements.”

Last year, CACI was “front and center” working hard for the passage of the bipartisan transportation funding bill, HB-1242, which died on a party-line vote in the Senate Finance Committee.  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 repay the issuance of $3.5 billion in bonds to fund transportation projects.

The 2018 Session and the November Election: A Battle of Competing Proposals

This session, in addition to SB-1, there are competing proposals on how to address Colorado’s transportation funding shortfall:

• The Metro Denver Chamber of Commerce leads a coalition to put a measure on the ballot to increase the state sales tax.
• Colorado Concern leads another coalition effort to persuade the legislature to put on the ballot a measure to raise revenue by increasing the ownership tax that vehicle owners pay.
• Governor John Hickenlooper proposed dedicating $148 million of the new revenue (because of the Federal tax bill and the state’s strong economy) to repay state-issued bonds to fund transportation project.

The Problem and Past Efforts to Increase Funding

The booming population growth that Colorado has experienced since the Great Recession of 2008-2009, with resulting traffic congestion on many roads, especially along the Front Range, and the deteriorated state of many roads and bridges, has put the issue front and center politically

CDOT puts the tab at $9 billion to fully fund the backlog of transportation projects over the next decade.

Some General Fund money has gone to transportation in recent years: $357.2 million total in the three fiscal years ending this June 30^th.

Last year, SB-267, the rural sustainability bill, provided, among other things, a $1.88 billion down-payment toward addressing the CDOT recommended $9 billion need over the next decade for new funding to modernize and expand the state’s roads-and-bridges to handle the Colorado’s economic growth and booming population.  CACI supported the bill.

SB-267 will provide $100 million per year from the General Fund for transportation to pay back the issuance of $1.88 billion in state bonds called “certificates of participation.”  In effect, the legislature mortgaged state buildings to raise money for transportation investment.  If SB-1 were to become law, however, it would nullify the issuance of SB-267 “certificates of participation.”

The Revenue Windfall

The debate under the Gold Dome about increasing transportation funding has been going on for years.  The major factor that has added spice and zest to this year’s debate is the forecast of substantially more tax revenue this fiscal year and next.

The new factor is the unexpected “windfall” of almost $1 billion in projected revenue caused by Colorado’s strong economy and the passage of the Federal tax bill.

The December revenue forecast by Legislative Council economists projects an additional $962.7 million for the 2018-2019 fiscal year beginning July 1^st largely because of the enactment of the “Federal Tax Cuts and Jobs Act” and its effect on Colorado’s tax base but also because of the state’s strong economy.  This amount represents an 8.7 percent revenue increase above what the legislature had approved for spending and the reserve for the current 2017-2018 budget year, which ends June 30^th.

The Politics of Transportation Funding

Democrats

In his State of the State speech on January 11^th, Governor John Hickenlooper called for the legislature to refer to the voters a measure for the November ballot to increase taxes to pay for transportation improvements.  Prior to his speech, he had called for $148 million of the revenue to go to transportation.

The legislative Democrats want a dedicated revenue stream to eliminate the $9 billion backlog, which means asking the voters to increase the state sales-and-use tax, which is currently 2.9 percent.

If the Senate sends SB-1 to the House, its fate is problematic, given that the Transportation Committee’s two Democrats voted against it.

In addition, in her opening-day speech, House Speaker Crisanta Duran (D-Denver) called for more money for transportation but did not specify a number, saying that transportation would have to compete with other priorities for the new revenue.

Republicans

Republicans argue that the state budget, approaching $30 billion, should contain funds for transportation.  Only if the legislature first allocates substantial General Fund money for transportation will voters be persuaded to then approve a state sales-tax hike for transportation.

If the legislature can’t approve funds for transportation this session when the State stands to take in the additional $1 billion “windfall,” then the voters will never approve a sales tax hike increase.

State Departments

Three State department– Corrections, Human Services and Education–sent representatives to the House Transportation Committee hearing on January 23^rd to speak in opposition to SB-1.  They argued that their departments would suffer if there is an economic downturn while at the same time $350 million in sales tax revenue is dedicated for transportation.

Details of SB-1

Here’s the legislature’s detailed description of the introduced bill:

In 1999, the voters of the state authorized the executive director of the department of transportation (executive director) to issue transportation revenue anticipation notes (TRANs) in a maximum principal amount of $1.7 billion and with a maximum repayment cost of $2.3 billion in order to provide financing to accelerate the construction of qualified federal aid transportation projects. The executive director issued the TRANs as authorized, and the TRANs have been fully repaid.

Section 8 of the bill requires the transportation commission (commission) to submit a ballot question to the voters of the state at the November 2018 statewide election, which, if approved:

• Would authorize the executive director to issue additional TRANs in a maximum principal amount of $3.5 billion and with a maximum repayment cost of $5 billion; an
• Would, in conjunction with sections 3, 4, and 7, repeal current law, enacted by Senate Bill 17-267, that requires the state treasurer to execute lease-purchase agreements of up to $1.88 billion for the purpose of funding high-priority qualified federal aid transportation projects.

The additional TRANs must have a maximum repayment term of 20 years, and the certificate, trust indenture, or other instrument authorizing their issuance must provide that the state may pay them in full before the end of the specified payment term without penalty. Additional TRANs must otherwise generally be issued subject to the same requirements and for the same purposes as the original TRANs; except that the commission must pledge to annually allocate from legally available money under its control any money needed for payment of the notes until the notes are fully repaid. Section 9 requires TRANs proceeds not otherwise pledged for TRANs payments to be credited to the state highway fund.

On and after July 1, 2018, section 5 requires 10% of state sales and use tax net revenue to be credited to the state highway fund and used first to make TRANs payments. Section 6 specifies that state sales and use tax net revenue credited to the state highway fund that is not expended to make TRANs payments and TRANs net proceeds credited to the state highway fund must be used only for qualified federal aid transportation projects that are included in the strategic transportation project investment program of the department of transportation (CDOT) and designated for tier 1 funding as 10-year development program projects on CDOT’s development program project list. At least 25% of the TRANs net proceeds must be used for projects in counties with populations of 50,000 or less and at least 10% of the TRANs net proceeds must be used for transit purposes or transit-related capital improvements. Section 7requires CDOT to include specified information about the state sales and use tax net revenue and TRANs net proceeds in its annual report to the senate transportation committee and the house transportation and energy committee.

The bill’s Fiscal Note was released January 19^th.

Contact CACI

CACI members with questions about SB-1 and transportation funding should contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.

More Information

For more information on SB-1 and news media coverage of the transportation-funding issue, read:

“Colorado roads: Business groups offer more funding options,” by Ed Sealover, The Denver Business Journal, March 1^st.

“Stalemate over transportation solutions continues at Colorado Capitol,” by Marianne Goodland, Colorado Politics, February 26^th.

“A transportation sales tax hike could be headed to the Colorado ballot.  But can it pass?”  by John Frank and Brian Eason, The Denver Post, February 23^rd.

“Colorado civic leaders call for statewide sales tax hike to boost road money,” by John Frank, The Denver Post, February 22^nd.

“Denver Chamber submitting transportation sales-tax ballot initiatives,” by Ed Sealover, The Denver Business Journal, February 22^nd.

“Senate Transportation Funding Bill Clears First Committee on Partisan Vote,” CACI Colorado Capitol Report, January 26^th.

“Senate Finance Committee Kills Transportation Funding Bill,” CACI Colorado Capitol Report, April 26, 2017.

CACI's Dan Pilcher Named Co-Chair of the Council of State Chambers Business Operations Committee

The Council of State Chambers (COSC), the national organization that brings together leadership from state chambers around America, has namedCACI’s Dan Pilcher to co-chair its new COSC Business Operations Committee. COSC is establishing the Committee to provide a forum for discussion of business management issues among the state chambers around the country.  “The primary goal of the committee will be to provide a venue for networking, information and best practice sharing, with ongoing conversations and education for state chambers professionals.”

COSC selected Pilcher from among his peers in other state chambers because of his experience and insight in the management of a state chamber.  Stephanie Martin of the Georgia Chamber of Commerce will serve with Pilcher as the other co-chair.

CACI President Chuck Berry commented, “The Council made an excellent choice in asking Dan to co-chair this important new group, and I am sure that all those involved will benefit from his leadership and perspective.”

Berry also noted: “Dan recently marked his 20-year Anniversary serving CACI and its members.  He has performed a variety of duties for CACI through these years, beginning as Research Director in 1998. Dan has worked as CACI’s Chief Operating Officer since 2001.  Dan also serves as the secretary to CACI’s Executive Committee and the Board of Directors.”

Kathleen Staks, Executive Director of the Colorado Energy Office, Addressed CACI Energy and Environment Council

On Wednesday, February 28^th Kathleen Staks, Executive Director of the Colorado Energy Office addressed CACI Energy and Environment Council. Ms. Staks discussed legislation and policy issues that directly impact CACI’s members and the business community, as well as, answered questions from the council members.

The council discussed several bills including:

• HB 1157 Increase Reporting Oil & Gas Incidents (Becker K. & Singer/none)
• HB 1215 Safe Disposal Naturally Occur Radioactive Material (Arndt / none)
• SB 167 Enforce Requirements 811 Locate Underground Facilities (Scott & Donovan / Winter & Saine)
• SB 009 Allow Electric Utility Customers Install Energy Storage (Fenberg & Priola / Winter & Lawrence)

The council took an oppose position on HB 1157 and an oppose as introduced position on HB1215.  The council will monitor SB 167 and changed its position on SB 009 from oppose as introduced to monitor.

The council also discussed the Air Pollution Control Division Stationary Source Fund fee increase since the Air Pollution Control Division (APCD) responded in writing to the CACI memo, dated January 16, 2018, that outlined comments and ideas for efficiency improvements CACI members believe should be included in any fee increase discussions. A copy of the APCD’s response is available here. A copy of the January 16th CACI memo is available here.

The next Energy and Environment Council will be March 28^th from noon-1:15 pm at CACI’s office.

CACI Launches Its 5th Year of the EXECs Advocacy Program

On Thursday, February 15, CACI launched its 5^th year of the CACI EXECs Advocacy Program. This year’s class is comprised of 30 business leaders representing 26 different companies. The EXECs Advocacy class spent the afternoon competing in a downtown Denver scavenger hunt. While there are only winners in the CACI EXECs Advocacy Program- special recognition goes to the Purple Team for getting 1^st place in our friendly competition followed by the Green Team in 2^nd place.  Yellow Team comes in 3^rd, and Red Team comes in 4^th.

For more pictures from this fun afternoon, please click here and follow CACI’s Facebook page.

CACI Day at the Capitol

Agenda

Support CACI’s Golf Tournament-Sponsorships Now Available

Friday, May 25, 2018
The Broadmoor
1 Lake Avenue, Colorado Springs
East Course
Registration – 11:00 a.m.
Shotgun start: 1:00 p.m.

Please visit our website for more information or to register for the golf tournament.

For sponsorship inquiries, please contact Senior Vice President, Events & Political Fundraising Tricia Smith

CACI's Legislative Agenda

Below is a list of bills and their status on which CACI Policy Councils have taken positions. For more information on the bills, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.