Colorado Legislative Council Staff

STATE and LOCAL

REVISED FISCAL NOTE

(replaces Fiscal Note dated April 2, 1998)

State General Fund Expenditure Impact

State Cash Fund Revenue Impact

Local Revenue and Expenditure Impact

TITLE:            CONCERNING INCREASED FUNDING FOR TRANSPORTATION NEEDS IN THE STATE OF COLORADO, AND MAKING AN APPROPRIATION IN CONNECTION THEREWITH.

Summary of Legislation

            The revised bill would transfer $100 million in General Funds to the Capital Construction Fund in FY 1998-99 and extend the current diversion of 10 percent of the sales and use tax to the Highway Users Tax Fund (HUTF) an additional six years. Under current law, the State Highway Fund receives 10 percent of the sales and use taxes attributable to automobiles and related items until FY 2001-02. Cities and counties do not receive any of the current sales and use tax diversion. The revised bill would extend the diversion until FY 2007-08 and change the distribution in the extended years so the state would receive 60 percent, cities 18 percent, and counties 22 percent. The provisions concerning the State Excess Revenue Transportation Fund have been removed. The increase in the percentage of the sales tax diversion has been removed. The bill would become effective upon the Governor’s signature.

State Revenues

            Highway Users Tax Fund. Under current law, all ten percent of the sales and use taxes attributable to the sale of motor vehicles and related products is diverted to the State Highway Fund in the Highway Users Tax Fund (HUTF) until FY 2001-02. As amended, this distribution of the current diversion would not change. The bill would extend the diversion another six years and change the distribution in the additional years to include the State Highway Fund, cities, and counties. Table I below provides an estimate of the additional amount of the diversion of sales and use taxes for each year. This bill would divert approximately $1.4 billion in additional sales and use taxes in the next ten fiscal years to the HUTF.

            Capital Construction Fund. The bill would also transfer $100 million in General Funds to the Capital Construction Fund in FY 1998-99 (see Table I). The state share would be $60.0 million and $18.0 million would go to cities and $22.0 million would go to counties. These funds would be used for financing state and local highway projects. The reengrossed bill would not transfer excess TABOR revenues.

Table I

State Expenditures

            The bill would divert $100.0 million in General Funds in FY 1998-99 identified in Table I. In FY 2002-03, $200.9 million in additional sales and use tax revenues would be diverted to the HUTF. The bill would increase the amount of money available for state highway projects by an estimated $820.4 million in the next ten fiscal years. In FY 1998-99, $60 million would be available for state highway projects through the Capital Construction Fund. The HUTF would have an additional $200.9 million to distribute in FY 2002-03 (see Table II). Table II also identifies the 20 percent of the state share that may be used for major investment study corridors provided for in SB 97-001.

Table II

* Twenty percent of the state increase may be used for major investment study corridors.

Local Government Impact

            Table II provides an estimate of the amount of revenue that this bill would provide to cities and counties. Over the next ten fiscal years, cities would receive an additional $246.1 million in revenue and counties would receive $300.8 million.

Spending Authority

            The bill transfers $100 million from the General Fund to the Capital Construction Fund in FY 1998-99. This fiscal note implies no additional spending authority would be required to implement the provision of this bill in FY 1998-99.

Departments Contacted

Revenue          Transportation            Treasury