A new 2 cents-per-gallon fee on fuel consumption beginning in July will help generate an estimated $5.3 billion in transportation funding over the next decade. The fee will increase by 1 cent per gallon each July until it reaches 8 cents per gallon in fiscal year (FY) 2028-29. It will remain at that level until FY 2031-32 when the fee is indexed to the National Highway Construction Cost Index (NHCCI) inflation.
The increases were provided by state Senate Bill 260 (SB 260), signed into law June 17, 2021, by Colorado Gov. Jared Polis (D). It also creates four state-backed enterprises to provide additional sources of transportation funding through separate fees and revenue bonds.
SB 260 also:
- Creates a $2 per day fee on car-sharing services.
- Indexes an existing $2 per day on car rentals for inflation.
- Temporarily lowers vehicle registration fees by $11.10 per vehicle this year, and by $5.55 in 2023. Fees beyond 2024 remain unchanged.
- Prioritizes mitigating the impacts infrastructure development can have on the environment.
House Speaker Alec Garnett (D-Denver) and Senate Majority Leader Stephen Fenberg (D-Boulder) were among the main sponsors of the bill. Outside advocacy and business organizations also rallied support. The bill passed along party lines, 41-24 in the House and 20-15 in the Senate.
The Transportation Investment Advocacy Center (TIAC) staff researches and prepares detailed case studies of successful — and unsuccessful — state and local legislative and ballot initiatives to increase transportation infrastructure investment. Each study explores the key players, politics, issues, and media involved in the effort, and summarizes campaign “best practices.”
Read the Colorado SB 260 case study for more information.
Register for the State & Local Transportation Funding Workshop hosted by ARTBA-TIAC July 12-13. The workshop will include a session on “New Funding Strategies for Continued Growth in Freight Traffic”.