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• Board Meeting Date: 9/16/2008
• Description: CF Section - Amendment 52 - Use of Severance Tax Revenue for Highways
• Board Meetings - Doc Type: Memo

3ra Draft
1 Since this measure is a constitutional change, if both measures pass, any parts of
2 Amendment (#113) that are found to be in conflict with this measure will not take effect.
3 These issues will be resolved after the election. The state will likely implement the
4 measures based on a state legal opinion, or the court may have to decide how the
5 measures take effect.
6 Arguments For
7 1) Amendment 52 increases funding for highways by an estimated $226 million
8 over the next four years without raising taxes. The most recent statewide transportation
9 plan expects the cost of maintaining the current highway system to be significantly
10 greater than the available money. This revenue shortfall has occurred in part because
11 better vehicle fuel efficiency and higher road construction costs have decreased the
12 purchasing powerof gasoline taxes, which is one of the system's primary funding
13 sources. By amending the state constitution, Amendment 52 creates a new, dedicated
14 source of money for highways that cannot be changed without another vote of the
15 people.
16 2) Amendment 52 creates a permanent revenue stream for highway projects, with
17 emphasis on congestion relief for I-70. I-70 is a key transportation corridorfor both
18 Colorado residents and visitors to the state. The highway supports both intra and
19 interstate commerce, provides access to key ski and recreational areas, and is an
20 important commuter route. However, funding for construction and maintenance has not
21 kept pace with increased traffic on the highway. Anew source of money is vital for
22 improving this transportation corridor.
23 3) The recent growth in oil and gas production has resulted in severance tax
24 revenue that far exceeds the funding requirements of the state programs it has
25 traditionally supported. The money available for state programs has grown from
26 $8 million to over $100 million in the past few years, and is expected to continue to
27 grow. Amendment 52 allows funding for existing state programs to grow by inflation,
28 while refocusing future growth in severance tax revenue on transportation problems
29 facing the state.
30 Arguments Against
31 1) Amendment 52 diverts money that would help meet Colorado's rapidly growing
32 water demand and maintain its aging watersupply system. Half of the money shifted to
33 highway projects under this measure would be available under current law to provide
34 loans and grants for water projects, water conservation, and other programs. A recent
35 study indicated that current and planned water supply projects are likely to meet about
36 80 percent of the estimated demand by 2030. By diverting over $100 million in the next
37 four years from water projects to transportation projects, Amendment 52 hurts the
38 state's ability to meet long-term water supply needs.
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