COVID-19’s Fiscal Impacts on Transportation

While many in our industry are thrilled to see few vehicles traveling while social distancing is in full force, reduced travel demand means lower revenue being generated through the gas tax, which is the primary way transportation funding is generated. The Colorado Department of Transportation (CDOT) estimates a revenue shortfall of nearly $250 million over the next three years due to COVID-19.

This plummet in funding for CDOT is triggering delays and potential elimination of construction projects that were recently identified in a 10-year project pipeline. CDOT Executive Director, Shoshana Lew, presented an overview of CDOT budget gaps and how it impacts transportation at a virtual meeting last week. See the full presentation here.

The downturn in gas tax revenue due to COVID-19 only acerbates the existing long-term, sustainable funding source for transportation that has been a major problem for Colorado for years. Previous projections anticipated a $9 billion funding gap in statewide needs and statewide ballot issues in 2018 and 2019 to fund transportation have failed to meet the approval of voters.

Prior to the suspension of the 2020 legislative session, conversations were underway to consider potential new funding for transportation, including expanding legislation to form Regional Transportation Authorities, charging fees to Transportation Network Companies and other businesses whose business services benefit from transportation, and considering an increase in the state’s gas tax.

Due to the deficit of the state’s budget, these conversations will likely head another direction when the legislature resumes.

While the funding cuts are a significant setback to statewide transportation projects, we’ll continue to focus our efforts on exploring new partnerships to fund transportation and educating and empowering our community members to pursue sustainable modes of commuting.

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