The battle over road funding intensified at the state Capitol this week, where legislators are seeking to negate an initiative that supporters say is sorely needed but which critics insist would divert money from other state priorities.

Supporters of the initiative questioned the timing of new legislation, which emerged in the waning days of the legislative session. They also wondered about how much feedback sponsors sought, insinuating the House bill was crafted without the input from the road construction industry.

At stake is roughly $700 million in state dollars.

Introduced last week, House Bill 1430 would take effect only if Initiative No. 175 passes in November.

The initiative would require that transportation-related revenues be spent only on building and repairing roads and bridges, safety improvements, transportation planning and engineering, and Colorado State Patrol operations. About 67% of the revenue affected already comes from funds dedicated to highways under the Highway Users Tax Fund.

To date, the initiative has gathered about 75% of the required signatures to qualify for the ballot.

‘What if it may close the hospital?‘

House Bill 1430 — sponsored by Reps. Andrew Boesenecker, D-Fort Collins, Emily Sirota, D-Denver, and Sens. William Lindstedt, D-Broomfield, and Judy Amabile, D-Boulder — would essentially negate the initiative by reducing excise taxes on fuel, certain registration fees, and road usage fees from 2027 to 2030.

The bill creates the “Support Road Transportation Fund” for revenue generated by the initiative and clarifies that state funds collected to support road transportation do not include enterprise fee dollars.

The bill’s sponsors estimated that Initiative No. 175 would divert more than $700 million in state funds from areas like K-12 and higher education, the Department of Motor Vehicles, and the Peace Officer Standards and Training cash fund solely to roads. They said it would also divert money away from other critical services, such as health care.0

Boesenecker argued the ballot measure’s language does not make clear that increasing road funding means taking funds from elsewhere.

“Nobody would argue that we need to better fund roads in our state,” he told Colorado Politics. “However, if you’re going to propose that the voters are being asked to do this for the price of nothing, of course, the voters are going to say yes.”

“But if you ask, ‘What if it may close the hospital?’ That’s a very big question,” Boesenecker said.

The legislator said he and his cosponsors are happy to discuss how to better fund infrastructure improvements in Colorado, but “jeopardizing core services” isn’t the way to do it.

He also said he has continued to discuss with the proponents of Initiative No. 175 “what it means to fund transit in our state.”

“I would hope we could find a compromise, but absent that, we also need to make sure that folks are protected,” he said.

The sponsors of HB 1430 added the state is making progress on its road conditions, including improvements on more than 2,500 miles of rural roads in the past five years. They said more than 800 lane miles have also been improved through the Colorado Department of Transportation’s 10-Year Plan.

Initiative backers call bill ‘legislative gymnastics’

Backers of Initiative 175, including the Colorado Contractors Association, countered that the bill undermines the will of the voters, who, they said, have overwhelmingly expressed a desire for additional funding to maintain and improve roads.

Tony Milo, the group’s executive director, said the state’s crumbling roads are costing each Colorado driver more than $2,000 per year in time sitting in traffic and wear-and-tear on their cars.

A recent report by the Reason Foundation ranked Colorado’s highway system 42nd in the nation in terms of overall cost-effectiveness and condition. The state’s rural and urban interstate pavement conditions, meanwhile, ranked 46th and 45th in the U.S., respectively.

“If Colorado would just invest a small percentage of its budget annually to improve roads, it would save lives, improve congestion, create thousands of jobs, and save thousands of dollars of wear and tear on Coloradans’ cars,” Milo said.

Milo characterized the bill as the legislature’s attempt to circumvent the will of the voters before they’ve even had a chance to cast their ballots.

“House Bill 1430 is the General Assembly saying that they know better than the taxpayers where their money should be spent,” he said. “It’s an end around the voters, and it is as anti-democratic as it gets. Every legislator who votes for this bill is facing a real prospect of having to explain to their constituents why they voted to stifle their voices.”

Wade Haerle, executive director of Club 20, a coalition of businesses on the Western Slope, alleged the bill’s sponsors and the governor’s office refused to engage with backers of Prop 175.

When reached for comment, a spokesperson for Gov. Jared Polis sent the following statement: “The price of gas is now over $4 a gallon thanks to President Trump and his war in Iran. 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.” 

Club 20 Chairman Dan Noble, a former state lawmaker, first proposed using sales taxes on vehicles and vehicle parts to fund transportation infrastructure.

A 1979 piece of legislation known as the Noble Bill allocated two-thirds of sales and use taxes on cars and car parts to the Highway Users Tax Fund. Seven years later, legislation was passed increasing the allocation to 100% of all sales tax from vehicle and parts purchases, but the measure was repealed in 1988, according to Haerle.

“Taking the taxes that Coloradans already pay to maintain their automobiles to be used on roads is very popular, and (the sponsors) know it’s very popular,” he said. “So, this legislation, put in at the last minute late on a Friday evening, would do all kinds of legislative gymnastics to reduce the gas tax, to move vendor funds, all of these different things, to gut Initiative 75 before the voters have even passed it.”

Looming large in the background is Colorado’s $1 billion-plus state budget deficit, which backers of House Bill 1430 pointed to in their defense of the legislation effectively gutting Initiative No. 175.

“We cannot be in a structural deficit, making billions of dollars of cuts to crucial core services and have another $700 million in cuts to make because one special interest has decided that they want a bigger piece of a finite pie,” Sirota, Boesenecker’s co-prime sponsor, told members of the House Transportation, Housing, and Local Government Committee on Tuesday.

Colorado’s health care providers — particularly those that accept patients on Medicaid, which accounts for the largest portion of the state’s budget — are at risk of facing even more devastating cuts should Initiative 175 pass without House Bill 1430, added Jennifer Riley of Memorial Regional Health in Craig.

The small rural hospital is absorbing over $150,000 in Medicaid provider rate cuts this year, and like 82% of rural hospitals in the state, it is operating on unsustainable margins, she said.

Combined with the Medicaid changes outlined in the federal budget bill passed last summer, Colorado hospitals are facing a “compounding crisis” of state cuts on top of federal cuts, she said.

“Further reductions will force hospitals like mine to consider service reductions,” Riley told the committee. “House Bill 26-1430 is not a political statement — it’s a lifeline for communities like Craig.”

Jointly funded by the state and federal government, Medicaid provides health coverage to low-income residents, including children, pregnant women, seniors and people with disabilities. In Colorado, Medicaid covers one in four residents — about 1.2 million people.

The state’s Medicaid program has nabbed headlines in recent months with allegations of a fraudulent billing ring, improper payments for autism therapy and exploding cost in a relatively new program meant to provide health care to pregnant women and children illegally staying in the U.S.

While acknowledging the federal policy changes on eligibility, others have blamed mismanagement of the state Medicaid program, noting the explosive growth in both enrollment and spending. Some also said the state could have done a better job of cushioning the impact of losing hundreds of thousands of people from the Medicaid rolls during the “unwind” period.

An analysis by the Common Sense Institute suggested another culprit for Medicaid’s woes — the legislature, where Democrats have solidified their majority control following the 2018 elections. The authors argued much of the Medicaid spending growth in Colorado stems from expansive policy choices, rather than enrollment or medical inflation. They attribute about $858 million in annual costs to more than 180 health care bills enacted since 2019.

House Bill 1430 passed out of committee on a 9-4 party-line vote, with Republicans expressing worries about undermining voters’ will.

“By moving this bill now, legislators are telling Coloradans their votes don’t matter,” said Rep. Ron Weinberg, R-Loveland. “If politicians can rewrite the rules to get around a citizen-led road-funding measure before it even reaches the ballot, they’re not just undermining transportation policy, they’re overriding the will of the voters and setting a dangerous precedent for every future statewide campaign.”

Rep. Elizabeth Velasco, a Glenwood Springs Democrat, agreed that it is clear voters want more money diverted to road maintenance, but she said she believes they don’t want to do so at the expense of other essential services, such as hospitals and education.

“I agree that it’s a really difficult time for our state to want to continue to invest in our values and our communities when our hands are tied by TABOR, and I also agree that we must look at our communities in a holistic way,” she said. “We cannot afford to let hospitals and schools and essential services be defunded because of a ballot initiative.”

The bill, which passed through the House Appropriations Committee on Wednesday, and is now up for debate on the House floor.

Denver Gazette reporter Scott Weiser contributed to this story.