Prop 101 would hurt highways
October 10, 2010
Though many people understand the detrimental effect the Propositions 60, 61 and 101 will have on their lives, many are angry at having to pay such high license fees for the old heap that rarely leaves the driveway.
It is not obvious why the $35-per-license fees were initiated, so I would like to tell the story of the faster bill put through the Colorado General Assembly in 2009.
The Federal Highway Trust Fund was established in 1956 to build and maintain the U.S. interstate highway system. By 2007 CDOT was receiving $500 million for maintenance and safety programs from the trust fund, but then in 2008 the fund became insolvent due to changes made in 2004 in how the fund could be invested and spent.
CDOT found itself going from week to week, getting capital infusions from the state General Fund to just keep basic services afloat. In 2009 the ARRA Stimulus money became available, and CDOT embraced it fully, using it to do any projects that were shovel-ready and in the pipeline. But still CDOT needed to find an annual funding source that could replace the $500 million highway trust fund and requested the faster legislation from the General Assembly. Faster was projected to supply $225 million yearly. The license fee passed and now affords CDOT $165 million a year for their safety projects.
If Proposition 101 takes this away it will further deteriorate CDOT’s ability to maintain its already dismal schedule of safety upgrades for bridges around the state.
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As for Proposition 61, most people understand that the public bonds held by towns and municipal districts will all need to be collapsed from their current 25- to 30-year amortization to 10 years. But few understand that this will include the full 30-year interest accumulation, so that a $2 million, 25-year bond with a debt service of $127,000 a year will then be liable for $390,000 a year. This will bring many municipalities, including fire, school and library districts already on tight budgets from the weak economy, to a critical juncture.