Colorado May Nix Gasoline Tax, Raise Sales Tax
The state hasn’t increased the gas tax since 1991, leaving it with crimped funding for road projects.
Apr 16, 2019
COLORADO SPRINGS, Colo. –As Colorado motorists embrace electric and more-fuel efficient vehicles, the state’s gasoline tax revenue is on the decline. To help offset the loss in funding for transportation projects, some Colorado lawmakers are proposing to eliminate the gas tax and increase the sales tax, the Colorado Springs Gazette reports.
The last gas tax update was in 1991, when it was set at 22 cents per gallon. That’s a perk for gas-powered vehicles, but the Colorado Department of Transportation is seeing a negative impact in funding as a result.
“With increased vehicle fuel efficiency resulting in less gas tax revenues, increased population and [vehicle miles traveled] creating more wear and tear on the roads, and declining purchasing power with the value of the dollar worth half of what it was in 1991, CDOT is facing a $25 billion funding gap over the next 25 years,” according to a CDOT fact sheet on the gasoline tax.
But it would take years for a small gas-tax increase to reach $25 billion. Instead, Colorado lawmakers are looking at a solution that eliminates the gas tax and boosts the sales tax. Democratic Rep. Matt Gray of Broomfield, Colorado says that Senate Concurrent Resolution 3 would likely be revenue negative in the first year but would gain traction after that. The bill would not affect federal gas taxes and would address two transportation funding issues: Help the backlog of projects and create a long-term funding solution, Gray said. If adopted, the concurrent resolution would be on the ballot in 2020.
Other states, however, are considering a gas tax hike, as reported by NACS Daily. In Michigan, Gov. Gretchen Whitmer is proposing a 45-cent-per-gallon increase in her budget. And in Ohio, Gov. Mike DeWine signed into a law a 10.5 cents-per-gallon increase to the state’s motor fuel tax.
