Updated 5:40 p.m.
Colorado is set to add a new fee to gasoline purchases this summer, and the public will get a chance to weigh in on whether to delay the increase by six months during a hearing that's expected to be held at the state Capitol later this week.
Democrats passed the fee increase in 2021 as part of a multi-billion-dollar plan to fund highways, transit and electric vehicles. Democrats are now proposing a pause on the gas fee through House Bill 1351.
The new 2-cent per gallon gasoline fee is slated to go into effect July 1. It’ll eventually increase to 8 cents per gallon.
“Some of these are incredibly important and popular policies actually,” said Democratic Senate President Steve Fenberg about last year’s bill that added the fee in a sweeping transportation package expected to direct $5 billion into infrastructure projects, transit and environmental mitigation to offset the impacts of the transportation system.
The new fees pay for a large portion of it, everything from rural roads to electric public transit vehicles.
In addition to the gas fee, the 2021 package included new fees on deliveries and ride-sharing apps like Amazon, GrubHub and Uber, and higher registration fees for electric vehicles.
Pausing the gasoline fee is a 'no-brainer' given the economy
Fenberg said pausing the new gasoline fee is a “no-brainer.”
“Given the economy and what's going on in the world right now, and the fact that we have funding to be able to cover some of these costs,” he said.
Democrats plan to backfill the revenue lost from pausing the gas fee with roughly $60 million in one-time federal pandemic emergency relief money. Those COVID funds would also offset a temporary reduction in vehicle registration fees.
“Now is simply not the time when families are struggling with $3.80 a gallon gas, rent has gone up, groceries cost more, now is not the time,” Gov. Jared Polis said in January when explaining the proposal. “We would love to avoid any fee increases on gas to provide some relief at the pump.”
On a recent morning, Lindy Allen stopped by a gas station in Lakewood to fill up her SUV.
“It was over $75,” she said — about $20 higher than normal.
Allen said everyone needs some economic relief right now.
“We haven't seen these prices in my lifetime, so I don't support any type of tax increase.”
Republicans have long opposed the bill that created the gas fee and others
The 2021 bill that created the fees, SB 260, was controversial inside the statehouse.
It passed with only a single Republican “yes” vote. Conservative groups are now suing over it, arguing the measure violates restrictions on the amount of new fee revenues the state can pass without voter approval. Under the Taxpayers Bill of Rights, a public vote is already required to approve tax increases.
Republican lawmakers also disliked other items in the 2021 transportation bill. Republican Sen. Dennis Hisey from Colorado Springs, who sits on the Senate Transportation Committee, said it was an environmental bill disguised as a transportation measure.
“It was absolutely not something that CDOT should have been involved in,” he said. “If we want to implement those types of things, they need to be heard as part of an energy bill, not part of a transportation bill.”
Even though Hisey opposed last year’s transportation package, he said he will likely back the latest proposal to delay the new gasoline fee. His message to Democrats: “I'm in favor of helping you reduce the fees that you put on us.”
Hisey said he will still push Democrats to go beyond pausing the fee until early next year.
“Let's just go ahead and reduce all of those fees permanently, as opposed to just for a 6-month temporary period. [It] looks an awful lot like an election year ploy to me.”
One conservative group wants to go a step further and lower the gas tax
And Republicans aren’t focused solely on eliminating fees. The conservative group Americans For Prosperity says it will also pursue a ballot measure this fall that would ask voters to lower the gasoline tax.
Allen and many Coloradans say any relief from taxes and fees is a good thing. Every little bit of savings helps, she said.
“I am glad they're not doing it now,” she said. But she said she does also support legislation that puts more money into infrastructure. Colorado’s gas tax hasn’t been increased since the early 1990s, and the Colorado Department of Transportation has a backlog of projects that require billions in additional spending.
“I would be more on board if we can get our gas prices under control,” she said. “ But at this point, you know, we just continue to see inflation and gas prices rising. It's not the time.”
Editor's note: This story has been updated after state lawmakers postponed the public hearing that was originally scheduled for Monday.
