Denver Regrets Not Using Revenue Ranges for Transportation Sales Tax

One of the most common local sales taxes in the United States is that one for transportation funding. I grew up in San Diego County, where we have “TransNet“—a 0.5% sales tax divvied up between freeways, local roads, and mass transit. The sales tax pays for few projects by itself but rather provides a little bit of funding to every project, in part to leverage state and federal matching funds. In 2004, 67% of San Diego voters approved an extension of TransNet to 2048.

In some areas, these transportation sales taxes are big pieces of the pie. Los Angeles has a total of 1.5% in transportation sales taxes, consisting of 0.5% approved in Proposition A (1980), 0.5% approved in Proposition C (1990), and 0.5 approved last year in Measure R. Together the taxes collect over $1 billion a year.

Denver, Colorado also has 0.4% “FasTracks” tax to fund the expansion of the city’s rail system. But with sales tax revenue dipping, officials are discussing an effort to double the tax:

RTD says it should have built in more time for environmental studies of FasTracks corridors, created a program-wide contingency fund for the massive project and provided a range of “best-case and worst-case cash flows” from anticipated tax collections rather than using exact revenue figures.

These are among the findings of a “lessons learned” analysis the Regional Transportation District has prepared on the financially troubled FasTracks program, which is $2.3 billion short of what is needed to complete construction by 2017.

It might be too-little-too-late for Denver, but RTD’s ideas on how best to project revenues should be taken to heart by other government agenices.