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Senate Unanimously Approves Bipartisan Transportation Funding Bill
This morning, on final, Third Reading, the Senate unanimously approved an amended SB-1, which sends it to the Democrat-controlled House and an uncertain fate.
On Wednesday, March 21st, the legislative log-jam over SB-1, the Senate Republicans’ bill to address transportation funding, broke when three Senators joined the minority Democrats in a bipartisan compromise effort on Second Reading to send the amended bill to the Democrat-controlled House that now at least stands a chance of being approved.
At the center of the compromise was Senator Rachel Zenzinger (D-Arvada), who developed an amendment to the bill which was adopted after lengthy, intense discussions. Joining the minority Democrats were Republican Senators Owen Hill (Colorado Springs) and Don Coram (Montrose) and unaffiliated Senator Cheri Jahn (Wheat Ridge), a former Democrat.
“I commend the Senators for coming together in a bipartisan fashion to compromise on what is clearly the most important bill of the session for all Coloradans,” said Loren Furman, CACI Senior Vice President, State and Federal Policy, “because it will finally address in a major way the $9 billion backlog of projects needed to address the most serious problem facing our state’s economy.
Major Provisions of Amended SB-1
The salient features of the compromise include:
- Authorizing the spending of $500 million in fiscal year 2018-2019, which begins July 1st, on transportation.
- Delaying by one year asking voters to approve the issuance of the bonds (providing voters do not approve an initiated ballot measure this November to increase the sales tax to repay transportation bonds) that would solely be repaid from state revenue.
- Reducing from an earmarked $350 million annually in the introduced bill to $250 million for the amount of revenue that would be dedicated to repaying bonds issued to fund transportation projects
On to the House…
If the House amends the bill, then a conference committee of senators and representatives would have to forge a consensus and both chambers would have to pass the compromise bill before the legislature adjourns on May 9th. The progress of the bill in the House, however, will be delayed with the introduction in the House Tuesday of the $28.9 billion Long Bill, the state’s annual budget measure.
The Joint Budget Committee approved including in the Long Bill $495 million for transportation and an amendment to the Long Bill allocates the $495 million through a local government formula that was provided in a bill proposed last year that died in the Senate (HB 17-1242).
Legislative Summary of SB 001 as Amended:
Concerning transportation infrastructure funding, and, in connection therewith, requiring specified amounts of general fund money to be transferred to the state highway fund during state fiscal year 2018-19 for the purpose of funding new highway construction projects and annually during state fiscal years 2019-20 through 2038-39 for the purposes of maintaining the state highway system and repaying any transportation revenue anticipation notes that may be issued as specified in the bill and, if no citizen-initiated ballot measure that requires the state to issue transportation revenue anticipation notes is approved by the voters of the state at the November 2018 general election, requiring the secretary of state to submit a ballot question to the voters of the state at the November 2019 statewide election, which, if approved, would require the state, with no increase in any taxes or fees, to issue additional transportation revenue anticipation notes for the purpose of addressing critical priority transportation needs in the state by funding transportation projects; would exclude note proceeds and investment earnings on note proceeds from state fiscal year spending limits; and would reduce the amount of lease-purchase agreements required by current law to be issued for the purpose of funding transportation projects.
Potential Ballot Measures
The one-year delay in the amended version of SB 001 will allow voters to consider ballot measures that seek to increase taxes without competing against a referred measure from the legislature. The Metro Denver Chamber of Commerce leads a coalition to put a measure on the ballot to increase the state sales tax to generate transportation funding. The coalition has filed at least four measures to increase the sales tax from 0.5 cents to one cent and two more measures are expected to be filed. The revenue from the tax increases could be used to repay from $4.1 billion to $8.4 billion in bonds.
Additionally, the Independence Institute may place a measure on the ballot that would force the legislature to pay for transportation funding from existing General Fund revenues.
The Revenue Windfall
The legislature’s lengthy discussion over transportation funding and SB-1 late last year and this Session has been fueled by the last two quarterly state revenue forecasts (December 2017 and last Tuesday, March 20th) that predict a major revenue windfall because of the effect of the Federal tax bill and the state’s strong economy.
The new windfall number is even higher than it was in December with Tuesday’s quarterly revenue forecast from the Legislative Council. It is now up to an additional $1.296.2 billion for the fiscal year beginning July 1st. The December forecast projected $962.7 million more revenue for fiscal year 2018-2019 than was called for in the 2017-2018 budget ending this June 30th.
CACI’s Position and Role
CACI has worked closely with both House and Senate Republicans and Democrats as well as other interest groups toward a solution that can provide a long-term, sustainable solution to the transportation funding shortfall within the context of the unexpected revenue boom.
Although CACI supports SB-1 as it moves through the legislative process, the bill–if approved by the legislature–will still have to go to the voters in November 2019 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 referred measure in 2019 to determine its position.
Last year, CACI worked 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.
For information on SB-1 and the transportation-funding issue, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.
For news media coverage of this bill and the transportation funding issue, read:
“Here’s what’s in Colorado’s $28.9 billion state budget proposal for 2019,” by Brain Eason, The Denver Post, March 28th.
“Colorado budget writers set aside $825 million for schools, roads and PERA, setting stage for spending fight,” by Brian Eason, The Denver Post, March 21st.
“Highway bonding plan gets bipartisan support—for 2019 ballot,” by Ed Sealover, The Denver Business Journal, March 22nd.
“Democrats reach dramatic compromise on Republican lawmakers’ proposal to fund billions in fixes for Colorado’s roads,” by Jesse Paul and Brian Eason, The Denver Post, March 21st.
“Legislative discussion of road-funding tax and bonding heats up,” by Ed Sealover, The Denver Business Journal, March 20th.
“Latest Colorado revenue forecasts—predicting booming economy—raise prospects for budget deal on transportation and education,” by Brian Eason, The Denver Post, March 19th.