Road Builders Want to Subsidize Driving By Making Other Stuff Cost More

The Colorado Contractors Association wants to raise the state sales sales tax to pay for roads (and maybe some transit, but definitely roads). The CCA wants to get the tax proposal on the November ballot.

Photo: David Sachs

In other words, everyone will pay more for consumer goods in order to subsidize driving. Basics like clothing will get more expensive — but gas wouldn’t, since it’s exempt from the state sales tax (the gas tax is separate). The new revenue would then go toward things like the state’s lavish road widening projects. Poor residents would be hit the hardest, since they tend to drive the least but spend a greater share of their income on goods subject to the sales tax.

Reports the Denver Business Journal:

Raising the statewide sales tax less than one cent on every dollar spent would raise between $600 million and $700 million a year, and the money would be directed to the Highway Users Trust Fund, meaning that it couldn’t be diverted for other purposes, [CCA Executive Director Tony] Milo said.

Under that plan, about 60 percent would go to state highways and some 40 percent to local roadways. And a portion — possibly 20 percent — of the overall pot would be set aside for transit projects, which are high on the priority lists of local governments, he said.

Contrary to popular belief, drivers don’t cover the costs of roads. A 2013 report from the Tax Foundation found that gas taxes, tolls, and fees pay just 51 percent of what it costs to build and maintain the country’s road infrastructure. The rest of the money comes out of coffers that might otherwise fund education, for example. While transit doesn’t cover its own costs either, the size of subsidies for moving people in single-occupancy vehicles dwarfs subsidies for moving people efficiently in buses and trains.

CCA’s proposal would increase road subsidies in Colorado even more.

In addition to raising the price of consumer goods, it would amount to a huge transfer of money from people who live close to work, school, and the grocery store to people who live far from those places and drive longer distances.

Driving is cheap right now. On average, gas in Colorado costs $1.56 a gallon. The state and federal gas taxes haven’t been raised in two decades. And the CCA wants everyone to pay more for everything to encourage driving and make traffic congestion worse?

Colorado DOT Executive Director Shailen Bhatt proposed fairer revenue sources: Raising the gas tax and charging drivers by the mile. That way there is actually some correlation between who uses the roads and who pays for them.