Feds’ $1.4 billion won’t fix job loss, Ritter cautions

By Chris Bragg

Even as Gov. Bill Ritter sounded an optimistic note about Colorado’s chances of winning $1.4 billion in federal funds to stimulate the economy, an allusion to Colorado’s lack of long-term transportation funding darkened his remarks.

“It’s one-time money. And we have to treat it as one-time money,” Ritter cautioned at a hearing Monday, Dec. 15, before the Colorado Legislature’s Committee on Job Creation and Economic Growth.

Ritter was referencing the probable source of Colorado’s latest windfall — the massive stimulus package that is expected to barrel through both houses of Congress so President-elect Barack Obama can sign it as soon as he’s inaugurated.

Through the course of the hearing, however, it became apparent that the committee — which is charged with creating “Jobs by June” — also will be looking at the employment situation in July, August and many other months that follow.

That’s because Colorado’s transportation infrastructure is so massively underfunded that even a federal infusion of money rivaling the New Deal couldn’t come close to fixing everything. The starkness of that reality has led to a growing belief among state office-holders that transportation funding must be addressed in this legislative session, even as the state struggles simply to balance the budget.

Although the governor’s immediate goal is getting people to work within 180 days on “shovel-ready” projects, those projects won’t provide jobs forever. That’s why Colorado needs a long-term mechanism to fund transportation projects, said Rep. Joe Rice, D-Littleton, who previously proposed increasing fees on vehicle registrations to help achieve that.

“No matter whether we get a federal stimulus package or not, we still need to look at our own transportation funding system,” Rice said.

Transportation in Colorado has traditionally been funded by a gasoline tax, but in recent years, the yield from that tax hasn’t kept pace with infrastructure needs. The most likely long-term fix, according to Ritter’s Blue Ribbon Panel on Transportation, would be a ballot initiative raising taxes that would provide between $500 million and $1.5 billion in transportation funding each year.

Russell George, executive director of the Colorado Department of Transportation, is no tax-and-spend liberal. Still, the Republican former speaker of the House testified that the state’s transportation infrastructure needs a massive cash infusion.

“We have today’s demands and today’s system, and 1983’s dollars,” he said. “If we’re going to do better than 1983, then we have to add other resources.”

Out of the federal stimulus, George said, Colorado can expect between $180 million and $250 million for transportation specifically. That won’t even make up for all the money CDOT’s budget has lost over the past year, however, because of cuts of up to $428 million due to federal and state revenue shortfalls, George said.

That’s troubling during a time of rising unemployment, since each billion dollars of transportation spending creates about 37,000 jobs, according to George, who declined to say where he believes that money should come from.

The lack of transportation money has led to significant job losses, according to a handful of leaders in the construction industry who testified at the hearing. Many reported that in recent months they’ve had to eliminate half of their employees.

“If you do nothing, people are still out of work. Unemployment goes up,” said Greg McKnight, of the Rocky Mountain Minority Contractors Association.

“The cement industry is headed for a train wreck,” added Don Clem, executive director of the Colorado Ready Mix Association and Cement Council.

“Talk about some pointed testimony,” commented Rice after the gloom and doom was all over.

Although new transportation dollars undoubtedly will create jobs, many legislators are leery of asking voters to raise taxes, particularly during a recession. And if they need any backing for that sense of unease, they need only look at the failures of Amendments 51, 58 and 59 this past election.

In 2005, Referendum D, which would have provided more money for transportation funding, lost narrowly at the polls — and that was in good economic times. Even Ritter admitted that it might not be possible to get a similar measure passed in 2009. Legislation implementing new fees — which would not require a public vote — might be a more realistic option.

Sen. Shawn Mitchell, R-Broomfield, a stalwart of fiscal conservatism who will introduce a bill this session to eliminate the “Business Personal Property Tax,” said instead of raising taxes, Colorado should direct as much of its current resources as possible to transportation projects in order to jumpstart the economy.

“Raising taxes isn’t the only way to generate revenues for those projects,” said Mitchell. “Neither conservative economists nor liberal economists would counsel a tax increase during a downturn.”