Transportation funding requires persistence
May 7, 2007
Analysis by Floyd Ciruli

Colorado policymakers have struggled for more than a decade to develop sufficient, sustainable funding for state and local transportation projects. Appeals to voters for additional transportation funding throughout the decade have had varying degrees of success, but have not diminished the mounting needs and costs. Transportation stakeholders can learn lessons from the efforts of the last 10-plus years – one of the most important being persistence.


Romer and the Blue Ribbon Panel on Transportation
Gov. Roy Romer began the decade-long inquiry in 1995 with an evaluation of the state’s transportation needs and how to fund them. His Blue Ribbon Panel on Transportation¹ identified a funding shortfall of $13 billion for the state’s needs over the next 20 years. It prioritized the state’s 28 most urgent, significant transportation projects, calling them the “7th pot.” An initial $6 billion package of projects was assembled for funding.

More than $2 billion of needs were taken to state voters via a proposed 5-cent gas tax increase in 1997 (approximately $1.4 billion assigned to state projects and $1 billion to local). Opposition to the gas tax increase from the trucking industry, a growing TABOR surplus that many thought should be tapped for transportation spending, partisan polarization and weak polling numbers led to minimal support before the election. With no formal support, only 14 percent of Coloradans voted for it.

The remainder of the $6 billion was to be supplied by the growing state budget and the Denver Regional Transportation District (RTD). In 1997, approximately $150 million per year (SB-1) was dedicated for transportation from state funds for at least five years over and above regular Colorado Department of Transportation (CDOT) funding. RTD proposed a transit build-out – Guide the Ride – funded by a sales tax increase (a $0.04 increase to total 1 cent) that would have raised $1 billion in 10 years. Like the gas tax, it also lost substantially in the 1997 election.

Still committed to finding additional transportation revenue, Romer proposed a five-year TABOR referendum override for transportation and education funding in 1998. But the Romer era was ending, and the override became entangled in the gubernatorial election and failed.

Owens and the Federal Gas Tax
Gov. Bill Owens agreed additional revenue was needed, but rejected both new taxes and a TABOR override. Rather, he quickly proposed financing based on borrowing against future federal gas tax revenues. The TRANS proposal passed in the 1999 off-year election with 62 percent support, funding $1.7 billion of priorities – in particular, improvements built in partnership with RTD on the I-25 Corridor, the T-REX project (RTD asked for and won a TABOR override for bonds) and the widening and realignment of I-25 in Colorado Springs (partnering with El Paso County).²

Referenda C and D Help Transportation
At the start of Owens’ second term, the recession significantly de-funded state government, including transportation. After three years, the annual budget crisis led to a broad-based coalition of political, business and civic leaders and groups to form and support a five-year TABOR time-out. Called Referendum C, it won by a narrow majority in 2005 – 48,000 votes. In the same election, voters defeated by a narrower margin (14,000) a bond referendum (Ref. D) providing $2.1 billion for transportation and other capital projects.³

The mixed results of Referenda C and D demonstrated that overcoming TABOR limits is difficult. Even the powerful education establishment was able to modify the state’s TABOR limits by only a narrow majority. It mounted a campaign in 2000 with a complex proposal to override limits and redirect funds for K-12 public education. Facing only modest opposition, Amendment 23 barely passed with 53 percent.

However, one clear success for RTD in recent years was its second effort to raise the sales tax to 1 cent. It won a 58-percent majority from Denver metro voters in 2004, adding more than $4 billion in transit improvements.

The 2030 Statewide Transportation Plan
In 2005, near the end of Owens’ term, CDOT published a 2030 Statewide Transportation Plan⁴ that updated the earlier Blue Ribbon report and assessed changes in transportation demand, cost and revenue over the previous decade.

In spite of spending increases and project completions during the decade, the analysis identified an expanded shortfall of $48 billion to $103 billion over the next 25 years. The figure would depend on whether the goal was to sustain existing performance levels or achieve corridor visions described by regional transportation plans and preferences expressed by the public.

Ritter and the Colorado Transportation Summit
Gov. Bill Ritter, inheriting the well-documented transportation revenue shortfall, launched his funding initiative in April 2007 at a statewide conference led by his new CDOT leader, Russ George. Conference participants were asked to analyze the problem but primarily identify viable solutions in time for an election in 2008. There was general recognition that solutions will require substantial revenue increases that could involve voter approval.⁵

A broad range of revenue concepts is being considered, including some that are new to the general public, such as indexing the gas tax and a vehicle mileage tax.

Public Opinion and Transportation
Transportation is an important issue for Colorado voters. It was listed fifth in an October 2006 pre-election survey conducted for state economic development organizations as an issue for the governor and legislature to address.⁶

Question: What is the top issue you want the governor and state legislature to address? [Multiple answers]

The issue is typically in the top 3 or 4 priorities in annual Ciruli Associates polls for state government attention, and would have been in the same place in 2006 if immigration hadn’t been the salient election topic. Also, transportation and congestion are usually among the top issues in local surveys. For example, transportation/congestion was the second most-mentioned issue for local government to address in Jefferson and Adams counties in Ciruli Associates surveys conducted last summer. Education was mentioned first, but it is not a county or municipal responsibility.

Adams County – A Transportation Tax Case Study
Adams County is a recent case study in successfully winning voter approval for a transportation tax. In November 2006, 63 percent of voters approved to extend a half-cent sales tax for 20 years to continue county and municipal road projects and address other capital needs for criminal justice and county buildings. (Ciruli Associates pre-election poll showed a 62% win if the proposal was properly positioned with voters.)⁷

The characteristics of the voting environment were:

• The public was keenly aware of congestion, recognized growth was continuing and supported the proposed transportation solutions.
• The earlier funding had a track record of being used for roads as promised.
• Some of the funds went directly to local municipalities for their needs.
• The tax was not permanent and was an extension, not an increase.

Public Opinion on TABOR Amendment and Referenda C and D
In the October statewide pre-election poll cited above, three questions were asked regarding state fiscal policy. Coloradans’ responses indicate that state voters remain closely divided on state government financing.

The TABOR Amendment had only a plurality of support (46%) and one-third of voters opposed it (36%). However, numerous other surveys conducted by Ciruli Associates show a low level of trust for state government, and voters like the constitutionally embedded right to vote on tax increases and restrictions on spending.

Interestingly, Referendum C was statistically tied between supporters (45%) and opponents (46%) one year after its passage by 52 percent and generally good reviews on how it was being implemented – another indication of voters’ ambivalence regarding state revenue-raising efforts.

TABOR Amendment and Referenda C and D
October 2006 Voter Survey

Ciruli Associates, N500, 2006

Question: In 1992, Colorado voters passed the TABOR Amendment, a constitutional amendment that restricts tax and revenue increases, requires votes on all tax increases and refunds tax revenue over a certain amount. After 14 years in existence, do you support the TABOR Amendment or not support the amendment?

In 2005, there was a proposal on the ballot, Referendum C, that provided for a 5-year “time-out” for TABOR refunds. It allows the state to keep all the tax dollars it collects for five years. It passed by 52 percent. Regardless of how you voted on Referendum C at the time, as of today, do you support or oppose letting the state keep and spend all the revenue it collects for five years?

Also on the ballot in 2005 was Referendum D, which would have allowed the state to borrow up to $2.1 billion dollars for transportation and school construction projects around the state. The bonds would have been repaid by state revenue. It lost with 49 percent. Regardless of how you voted in November 2005, as of today, would you support or oppose a Referendum D-type of proposal?

Finally, and surprisingly, Referendum D – the $2.1 billion bond initiative for transportation and school construction – which lost in November 2005 by 49 percent to 51 percent, was, in fact, supported by 52 percent to 42 percent opposed in the poll one year later.  Analysis at the time of the election in 2005 by Ciruli Associates suggested that the small fall-off in votes and support between the two referenda reflected the lower level of attention Ref. D received due to its second-place position on the ballot and in public dialogue.  The history of Colorado’s transportation elections demonstrates voters’ preference for keeping funds already collected for a specific period of time is stronger than support for long-term borrowing.

One difference in the wording of the two referenda in the survey questionnaire could have influenced the polling results.  The Ref. C question contained only a general statement about a TABOR time-out.  In the Ref. D question wording, transportation and school construction funding were mentioned.  Research shows voters are attracted to specificity. 

The polling results suggest that transportation spending remains a challenge for state policymakers.  But a funding increase through bonding, such as Ref. D, should at least be considered in the mix of options.

 

Conclusion

For future proposals to succeed, the case for additional transportation funding will need to be reaffirmed with the state’s opinion leadership.  Also, transportation stakeholders among local, regional and state highway and transit constituencies will need to be aboard.  But, given the long history of studies and task forces, support should be achievable.  Making the case to voters for one or more solutions, some of which generate new revenue from fees or taxes, will be the larger challenge.  But as presenters at Gov. Ritter’s transportation summit pointed out, public funding initiatives, including bond initiatives, around the country are much more common today than a decade ago and often require multiple efforts to garner voter support.  As the history of Colorado metro transit and statewide transportation funding initiatives shows, having to make several efforts with voters using different proposals and messages is also the pattern in Colorado.

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¹Blue Ribbon Panel on Transportation 1995/1996.  Colorado Transportation Network 1996/1997.  Ciruli Associates provided voter polling, research and advocacy management.

²Ciruli Associates election report: “Transportation – Political Gridlock Broken,” November 1999.

³Ciruli Associates issue briefs: “Referenda C and D Face Uphill Battle, in August, Vote Would Have Lost,” October 2005; “Is Colorado Shifting to the Center of Political Spectrum, Producing a More Competitive Politics,” November 2005.

⁴Moving Colorado.  2030 Statewide Transportation Plan, 2005.

⁵Colorado Transportation Summit 2007.  Statewide Benefits of Transportation Investment, 2007.

⁶Annual Economic Development Council of Colorado (EDCC) Ciruli Associates survey of voters, October 2007.

⁷Adams County polling conducted by Ciruli Associates, August 2006.