After transportation funding took the brunt of last year’s state budget cuts, the Colorado Contractors Association came up with a plan to stop it from happening again.
Their proposal, a constitutional amendment known as Initiative 175, would enshrine road funding in the state constitution, giving it legal protections from funding cuts that are only provided to one other public service: K-12 education.
The state’s budget woes have only grown in the meantime, leading lawmakers to slash spending on healthcare, childcare, affordable housing, state worker pay and higher education as they try to address recurring shortfalls of over $1 billion a year. Legislators even scaled back a top bipartisan priority at the statehouse: Colorado’s new K-12 funding formula, which aimed to pump tens of millions of additional dollars into schools each year.
With more state budget cuts anticipated in 2027, the contractors association’s position only appears to have hardened. Supporters of Initiative 175 say Colorado’s roads are in such disrepair that if lawmakers won’t prioritize roads, voters should make them. The group has submitted most of the signatures it needs to qualify for the ballot, with a May 27 deadline approaching.
The measure’s backers have rejected calls to pull it from the ballot, dismissing cries from a wide range of interest groups that it will lead to $700 million in additional cuts to other services.
Now, with just days left in the legislative session, top state lawmakers are rushing to pass a bill to neutralize the ballot measure. If the ballot measure passes, House Bill 1430 would offset the spending required by Initiative 175 by temporarily cutting Colorado’s main funding source for roads, the state gas tax, as well as other transportation fees. That would effectively limit how much money the state has to spend on roads, sparing other programs from funding cuts.
Restore Our Roads, the campaign behind the ballot measure, accused lawmakers of subverting the will of the voters before they even have a chance to weigh in.
“By moving this bill now, legislators are telling Coloradans their votes don’t matter,” Tony Milo, president and CEO of the Colorado Contractors Association, said in a statement.
But — after years of playing defense against conservative ballot measures that have exacerbated the state’s budget crisis — statehouse Democrats say they’ve lost patience with groups that use the initiative process as leverage to get what they want from the Capitol. The contractors association and several other top supporters of Restore Our Roads are construction companies that would benefit financially from the measure’s passage.
“There is an immense frustration that we are experiencing when special interests legislate at the ballot for funding their particular special interest,” Joint Budget Committee Chair Emily Sirota told The Colorado Sun.
“When one deep-pocketed special interest is able to present a very narrow question to the voters like that, it’s really misleading because you’re not being asked the rest of the question,” added Rep. Sirota, a Denver Democrat. “‘Would you prefer to fund roads instead of your hospitals and schools and other services that your community relies upon?’”
How Initiative 175 would increase road funding
The language voters will see if Initiative 175 makes the ballot doesn’t sound controversial.
It would require state and local governments to spend “any state revenue collected to support road transportation on road transportation.”
But the fine print of the measure would represent a major expansion of road funding in Colorado.
Under Initiative 175, sales taxes paid to buy a motor vehicle would be classified as “revenue collected to support road transportation,” preventing those dollars from being spent on general state services as they are today. It does the same for 67% of sales taxes collected on auto parts.
Nonpartisan state fiscal analysts say the sales tax changes would blow a $264 million hole in next year’s general fund budget, which starts July 1, plus $539 million the year after that.
And, because the measure would amend the state constitution, lawmakers wouldn’t be able to make future cuts to road spending without voter approval. Budget writers in both parties say that will require immediate and ongoing cuts to healthcare and education.
“Our two biggest areas are K-12 and Medicaid, and that’s where it’s going to come from,” Rep. Rick Taggart, a Grand Junction Republican who serves on the Joint Budget Committee, said Wednesday on the House floor. “If we don’t do something right now, we’re shirking our responsibilities.”
Milo, the CEO of the contractors association, told The Sun in an interview that the constitutional protections were needed. That means a higher bar for passage — 55% of the vote, instead of a simple majority for a statutory change.
“If we were to pass a statutory measure, we have no confidence that the General Assembly won’t just reverse it,” Milo said. “We felt like we had to go to the constitution to get it locked in.”
But that argument has fallen flat among others who rely on the state for funding, but have no such protection from budget cuts.
At a committee hearing Tuesday, Jennifer Riley, CEO of Memorial Regional Health in Craig, told lawmakers that her rural hospital may have to reduce services as a result of compounding cuts at the state and federal level. If things get worse, she said, her patients may have to travel more than 50 miles away to find care.
“We’re not talking about belt-tightening,” Riley said. “We’re talking about survival.”
The dismal state of road funding
For decades, Colorado has primarily funded road construction through the 22-cent state gas tax, which is losing value to inflation and the rise in electric vehicles. The state also charges a number of fees on drivers, including vehicle registrations and an additional surcharge on gasoline.
All told, the taxes and fees generate more than $1.8 billion a year for state and local transportation projects.
Lawmakers have also passed measures over the years to devote general fund dollars to transportation, most recently in 2021 with the passage of Senate Bill 260. But when the budget gets tight like it is now, transportation funds are often among the first to wind up on the chopping block.
In the wake of the Great Recession, lawmakers eliminated transportation spending from the general fund for six years before restoring some funding. Last year, the legislature cut more than $100 million from the 2021 transportation funding package to help close a $1 billion budget gap.
“Roads have just been completely thrown aside as the forgotten stepchild,” Milo said.
Colorado’s not alone in funding transportation primarily with gas taxes and vehicle fees. The average state spends just 1.8% of its general fund on transportation, according to the National Association of State Budget Officers.
But even critics of the ballot measure agree that Colorado roads are poorly funded. The Colorado Department of Transportation says the state still needs to spend as much as $350 million a year more to keep up with maintenance and construction needs, according to a 2022 report. The American Society of Civil Engineers give Colorado’s roads a D+ on their annual infrastructure report card.
Still, lawmakers say that given the budget situation, it’s irresponsible to force the state to spend more on roads without new taxes or fees to pay for it.
“They’re just essentially taking money from one hand and putting it in the other and pretending the other hand still has money inside of it,” said state Rep. Andrew Boesenecker, a Fort Collins Democrat, who is co-sponsoring House Bill 1430 with Sirota.
Milo says it’s been tried, pointing to a 2018 measure that voters rejected that would have raised sales taxes to fund transportation.
“The problem right now is, they’re frustrated,” Milo said. “They’re feeling pinched. There’s not an appetite for a tax increase from the voters right now.”
Protecting the state budget
Legislative Democrats and the governor’s staff have met off and on with the Colorado Contractors Association since the ballot measure cleared its initial procedural hurdle in December.
But both sides say the sticking point remains the same: Democrats won’t negotiate unless the ballot measure goes away, and the contractors are unwilling to do that without a deal in place.
In recent weeks, the ballot fight spilled out into public view, when a coalition of healthcare organizations, education groups and liberal advocates sent a letter warning of the damage it would do to public services.
“Initiative 175 decimates Medicaid, K-12 and education funding by design,” wrote the group, called Keep Kids First. “Colorado absolutely needs thoughtful solutions to address transportation challenges. However, steep cuts to health care, education, and other essential services are not the answer.”
Restore Our Roads replied with a letter of its own dismissing the concerns as fearmongering, and said budget cuts weren’t their problem.
“Nothing in Initiative 175 cuts a single dollar from healthcare or classrooms,” the Restore Our Roads campaign wrote back. “Decisions about how to prioritize funding for each and every state program rests with elected officials and are not attributable to this proposed measure.”
With just days left before the legislative session ends on Wednesday, Democrats have taken a harder line, advancing a bill to nullify its effects on the state budget.
House Bill 1430 would cut the state gas tax by 8 cents, and cut other transportation fees as needed to cancel out the cost of Initiative 175.
In any other state, cutting taxes amid a budget crisis would only make matters worse. But in Colorado, those cuts will free up room under the state spending cap, allowing more income and sales taxes to flow into the general fund, where they can make up for the money diverted to roads.
For taxpayers, it’s largely a wash — much of what they gain from a lower gas tax will be offset by a reduction in taxpayer refunds, according to a legislative fiscal analysis. But budget writers say it will give them flexibility to fulfill the constitutional requirements of Initiative 175 without making further cuts to other services.
In a statement, Gov. Jared Polis signaled support for the bill, which received preliminary approval in the House on Wednesday.
“The price of gas is now over $4 a gallon thanks to President Trump and his war in Iran,” spokesperson Eric Maruyama said in a statement. “Of course the governor would support a bill to cut taxes and save Coloradans money, and that includes cutting the gas tax while protecting the state budget.”
Negotiations continue as tensions rise
At a testy Tuesday committee hearing, supporters and opponents of Initiative 175 alike accused the other side of engineering something akin to a hostage situation.
House Republicans railed against the Democrats’ proposed solution, saying it was an affront to democracy. Some local officials, including Kevin Ross, a Weld County commissioner, joined in, criticizing lawmakers for repeatedly balancing the state budget at the expense of roads.
“Frankly, it’s appalling the condition that our roads are in,” Ross said. “Yet this legislature is now saying, ‘we know better than the voters.’”
In response, Sirota used the word “appalling” six times to describe the state of other public services in Colorado.
“Frankly, the premise put forward by Initiative 175 proponents is appalling to me,” Sirota said. “It is placing the interests of one industry over the needs of the state as a whole.”
Milo, meanwhile, says discussions continue — but he has no plans to withdraw the ballot measure without a firm commitment from the legislature.
“We’re definitely open to some kind of compromise, some kind of middle ground that moves the needle forward on building and maintaining our roads,” Milo said. “But it’s got to be significant — enough money to move the needle. And it’s got to be guaranteed.
“We’ve had too many situations with this General Assembly over the years where we get promised something and the next thing you know, it’s taken away.”
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