Bob Beauprez recently proposed a new method of highway funding : increasing the sales tax and eliminating the gas tax. Mr. Both Ways needs to stop thinking everything's an either/or proposition.

Beauprez is right about one thing - the gas tax as it is currently formulated won't keep up with transportation demands. Colorado charges 22 cents for every gallon of gasoline. Eight years ago, that was 22% of the cost - today it's about 7%.

So, as our tax has been declining - the costs associated with transportation funding - concrete, steel, asphalt - have been growing exponentially. Add onto that the fact that Colorado is one of the fastest growing states in the country with increasingly complex transportation demands and you see the light at the end of the tunnel should be a train, but, since we can't afford it, it's just some guy walking in the tunnel with a flashlight.

So, why not eliminate the gas tax and increase the sales tax? Colorado is home to two primary interstates in the country - I-25 and I-70. Each of them hosts countless cross-country truckers who buy gas, but rarely stop for more than a bad cup of coffee and a burger. So, by moving the revenue stream for maintaining the highways from gas tax to sales tax, we shift the costs of transportation from these out of state taxpayers who have the highest impact on the roads to our citizens who may be riding a bike to work, for all we know.

Furthermore, the certainty of the funding source is brought into question with a sales-tax based revenue stream. Currently, our HUTF (Highway Users Tax Fund) is a dedicated cash fund that can only be used for transportation costs. By shifting the burden to sales-tax, that certainty is removed.

In a recent article in the Rocky - Dave Owen said "I think Beauprez's on the right track. You need some dedicated dollars for highways outside of general fund surplus, because in five years that's going to go away" (when the Ref C tax reprieve expires).

While I like Dave - he couldn't be more wrong.

First of all - we have "dedicated dollars for highways outside of the general fund surplus" now - IT'S CALLED THE GAS TAX! When Dave said "general fund surplus" what he really meant was "excess general fund" (believe it or not, there's a difference). If you eliminate the gas tax, you will ONLY have excess general fund dollars for transportation, because that's where our sales tax dollars are going. Finally, our excess general fund doesn't go away after the Ref C timeout because Referendum C resets the TABOR base to the highest revenue level during the 5 year timeout.

Until the next severe recession (such as 2001-2004) we will continue to have excess general fund (defined as revenues above our 6% General Fund spending cap). Then, when we recover from that recession, we will have them again because Ref C fixed the ratchet down effect in TABOR. We will be able to recover. That was the whole idea.

That's not to say transportation can't benefit from a variety of funding sources. It can. Most states enjoy both revenues from a gas tax and sales tax - Colorado does as well. Senate Bill 1 from 1994 set the process. If the state has sufficient revenues to meet our basic 6% general fund operating obligations (creating that "surplus" Dave Owen was talking about) then about 10% of sales tax revenues are dedicated to transportation. Ostensibly, 10% was chosen was because it was calculated that somewhere around that amount was probably what was being spent on transportation related purchases.

We know that our projected revenues for transportation are drastically below the amount we are going to need over the next 20 years. Some estimates say as much as $100 Billion (with a "B"!) less than the projected need. So, why not beef up the sales tax portion, and keep the gas tax? Or index the gas tax to the price of gas instead of by volume? Businesses cite "transportation infrastructure" as one of the most important considerations in establishing corporate headquarters in a state (along with K-12 and Higher Education) - so, how about addressing the corporate income tax rate in Colorado - one of the lowest in the country?

The state will have to come to terms with the transportation funding quagmire, but a shell game of revenues isn't going to do the trick. And shifting costs from out of state drivers to our Colorado residents isn't a very Colorado friendly solution either.