What does Colorado’s transportation funding crunch mean for manufacturers?

By Tim Heaton | Mar 19, 2017

My first car was a 1966 Pontiac Bonneville. To call it a big car would be a gross misrepresentation. In 1982, the political science club at CSU voted to generously offer my car to the British Government as a replacement for the HMS Sheffield, a guided missile destroyer which sank after being attacked in the Falklands war.

To say my car was a gas guzzler would be equally underrated. Back then, as a society, we were just beginning to understand "MPG" or miles per gallon. With a girlfriend going to school in Boulder, I used to measure my gas consumption as I traveled between Boulder and Fort Collins in "YPG" (yards per gallon). It was far more comforting to think that I was getting 14,080 yards to the gallon versus eight miles to the gallon.

Driving to the office today, my car with "eco-boost" told me I was averaging 31 MPG. Despite the remarkable improvement from 8 MPG, my friends who drive electric cars love to point out they have forgotten how to spell MPG. On that note, Coloradans couldn't even spell mass transit in 1982. Today, RTD has nearly 100 miles of light and commuter rails with an average weekday ridership of 329,855 passengers. These riders aren't worried at all about their MPG.

Yet, here's the irony. A gas tax on fuel consumption continues to be the primary source of funding for the maintenance of and improvements to our transportation system. Thanks to the improvements in gas mileage, on a mile per gallon basis, we are putting substantially less revenue into the highway fund. My friends with their electric vehicles are not contributing one cent, but they still drive on the same roads.

Both the state and federal gas tax rates are fixed. They do not rise with the price of gasoline, nor are the tax rates adjusted for inflation. Subsequently, the purchasing power of gas tax that is collected is shrinking, in fact by nearly 40 percent since 1993.

A report in The Denver Post last month summed this funding crisis up this way: "In 1991, the last time Colorado raised its gas tax, Colorado spent $125.70 per person on transportation, according to the Colorado Department of Transportation. By 2015, Colorado had added 2.1 million people, who are driving an additional 21.6 billion miles on the roads than in 1991 -- but spending levels had dwindled to $68.94 per person."

According to a report by TRIP, a national transportation research group, "Roads and bridges that are deteriorated, congested or lack some desirable safety features cost Colorado motorists a total of $6.8 billion statewide annually -- as much as $2,162 per driver in some urban areas, due to higher vehicle operating costs, traffic crashes and congestion-related delays." The same report stated that 41 percent of the major roads "locally and state-maintained in Colorado -- including interstates, freeways and expressways -- are in poor condition."

The report also found, "Annually, $323 billion in goods are shipped to and from sites in Colorado, mostly by truck. Seventy-five percent of the goods shipped annually to and from sites in Colorado are carried by trucks and another 21 percent are carried by courier services or multiple mode deliveries, which include trucking."

As a manufacturer, you understand the importance of being able to move your supply chain and finished goods quickly and efficiently. Congested roads add to the cost of goods sold, making it less attractive to do business in Colorado.

Fortunately, Republican Senate President Kevin Grantham, Democratic Speaker of the House Crisanta Duran, and Gov. John Hickenlooper have risen above partisan politics and developed a proposal that begins to address the state's transportation crisis. HB17-1242, as proposed and if passed by the legislature, would ask the voters of Colorado at the November 2017 statewide election to temporarily increase the rate of the state sales and use tax by 0.62 percent for 20 years beginning in 2018.

This is a significant change to the way we have been funding transportation. Is it right for Colorado? How will that affect Colorado manufacturers? Too soon to say. However, as the old saying goes, "If you are not at the table, you are on the menu."

If you are interested in participating in this discussion, contact me at tim.heaton@co-cama.org, and I will put you in touch with your legislator

Tim Heaton is president of the Colorado Advanced Manufacturing Alliance.