Colorado’s ability to build and fix the highways that are key to transporting goods and people could take a $110 million hit in the next fiscal year under budget-balancing proposals being offered by Gov. Jared Polis.
The two-tiered reductions — a permanent cut of $65 million per year and a short-term cut of $49 million in other funds — are part of $638 million in expenditure cuts and revenue boosts Polis has suggested to deal with rising Medicaid costs and falling inflation. And while officials acknowledge that such spending rollbacks must happen somewhere in the budget, both legislators and Colorado Transportation Commission members warn these cuts could be particularly deleterious for transportation safety.
Colorado Department of Transportation leaders, who dissected the proposed cuts for the CTC in two meetings held last week, haven’t identified particular projects that could be delayed due to the proposal. Because of contractual obligations, CFO Jeff Sudmeier said the impacts likely wouldn’t be felt in ongoing projects but instead in new projects slated to launch in the fiscal year that begins in July 2026.
Where the money would come from
Because any budget-balancing proposals must take money from CDOT programs paid out of the general fund — a small portion of the funding for a department that gets most of its money from federal and enterprise funds — they target just two pots of money. One is the FASTER fees on vehicle registrations that were passed in 2009 to help pay for roadway upkeep and the other is the $100 million annual general-fund transfer created through Senate Bill 260, a $5.3 billion transportation-funding package.
The Democratic governor proposed for that annual SB 260 allocation to fall by $39 million in the fiscal year that begins July 1 and then by a smaller amount of $24.5 million in the 2026-27 fiscal year. The money would be paid back in four increments between fiscal year 2029-30 and fiscal year 2032-33, but CTC members noted immediately that $100 million added to the budget in those years will be worth much less than $100 million now.
“These choices we face are sort of a transportation Sophie’s Choice,” commissioner Rick Ridder said about the depreciation of value in the payback.
In addition to the $39 million cut, CDOT’s highway budget will lose another $10 million next year, as Polis has ordered it to move that amount of money from highway projects to Bustang because pilot-project funding for the statewide bus service is expiring.
Building, maintaining highways would take hits
Under plans Sudmeier proposed to the CTC, the $49 million reduction would come from three places within the department’s 10-year funding plan, which dictates spending. Officials would cut $35.2 million from capital-mobility projects, $8.9 million from annual capital maintenance and $4.9 million from multimodal projects.
The second group of cuts would be the result of Polis’ budget-balancing proposal to make permanent a formerly temporary $11.10 cut to FASTER fees paid annually by vehicle owners on new registrations and registration renewals. The average vehicle owner pays about $72 per year, according to CDOT records, making the cut equivalent to a 15% reduction in fees.
CDOT officials plan to take $39 million of that $65 million total out of the FASTER safety mitigation program, which is focused on addressing documented safety hazards and undertaking preventive maintenance with the goal of reducing highway crashes. About $80.5 million now goes to that fund annually, meaning that the reduction would cut the fund essentially in half.
The other $26 million in FASTER-fee cuts would impact CDOT’s roughly $330 million asset-management program, which was established to cut the years- and decades-long road-maintenance backlog the state has amassed. Those reductions would fall into four pots: $9.8 million from the $233 million surface-treatment program, $7.6 million from the $63.4 million program for structures, $4.7 million from the $9.7 million geohazards mitigation program and $4 million from the $27 million system operations program.
“Continuous complaints about the condition of our roads”
Ongoing major projects like widening of Interstate 70 through the Floyd Hill chokepoint area aren’t set to be impacted. And the proposed cuts would only take money from state transportation needs, not the local funds CDOT passes to city and county governments.
But other potential widenings, intersection improvements, repairs and even multimodal projects will be hit. And that prospect makes transportation advocates very nervous at a time when, as Rep. Rick Taggart, a Grand Junction Republican and member of the influential Joint Budget Committee, said during a recent hearing, legislators have “heard continual complaints about the condition of our roads.”
“I’m not happy at all, and I don’t think any of us are,” CTC member Karen Stuart said during a recent commission hearing. “Cuts to asset management and FASTER safety projects are just not acceptable.”
Officials exploring other options
At least for now, however, alternatives remain limited.
CDOT can look to use about $18 million in unallocated federal transportation funds to offset some of the FASTER safety cuts, and it also could look to reallocate money from its 10-year plan in that direction, though that would mean cuts elsewhere, Sudmeier said. But, in answer to another question, he said it would be hard to find $10 million sitting around in the budget that would allow the department to take the money for Bustang out of any pot other than the SB 260 transfer.
JBC members also could decide that the transportation funding cuts are unacceptable and look to restore the money by cutting elsewhere in the budget. But the committee is raising questions about larger budget-balancing proposals — including Polis’ plan to convert state-chartered workers’ compensation insurer Pinnacol Assurance to a private company — that could de-prioritize restoration of highway funding.
Funding for highways could be central budget debate
CDOT Executive Director Shoshana Lew told the CTC on Wednesday that the department could look at turning more of its programs into enterprises that are funded by fees rather than general-fund transfers. While that would stop the flow of general taxpayer funding to them, making those areas exempt from Taxpayer’s Bill of Rights revenue limits, it also would mean they wouldn’t count against the budget cap and be subject to future raids.
CTC member Mark Garcia suggested it’s time for the state to “de-Bruce” its budget — a term for an effort to exempt all funds from TABOR revenue limits and allow it to keep excess income rather than give it back to voters. However, the last time legislators sought to do that, in 2019, voters rejected the idea.
So, for now, transportation advocates largely just remain frustrated at the proposed cuts to highway funding, which come after years of road backers and business leaders questioning already whether too many resources are being shifted from pavement to transit. But that frustration at least may signal that they will be willing to raise questions and try to reverse the cuts before the Legislature approves its budget sometime in late March.