October 22, 1999

Transit projects: TRANs: pros & cons

When you step into the voting booth on Nov. 2, one of the issues you’ll be asked to make a decision about is whether the state should borrow up to $1.7 billion to speed up certain high-priority state highway projects.

The loan would be placed toward acceleration of 17 of the 24 highway projects currently identified as high-priority corridors. Six of the needed projects would remain as originally scheduled, and one would be delayed under the state’s proposal to use the borrowed money.

Under the proposal, Transportation Revenue Anticipation Notes, commonly referred to as TRANs, would be issued to allow the state to borrow these additional funds without raising taxes.

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Repayment of both principal and interest on the TRANs loan would come from money the state receives when you pay federal gas taxes. Much of your taxes on purchases of gasoline are sent to the federal government, which then returns them to Colorado to use for transportation improvements and repairs. Repayments are limited to amounts of no more than 50 percent of the prior year’s payment of federal transportation funds to the state. The remaining revenue would continue to be used for other improvements and repairs.

Just like any loan, there will be interest to repay as well as the initial $1.7 billion. But Referendum A also stipulates that the total repayment of the loan may not exceed $2.3 billion. Voters are being asked to approve the additional debt with the understanding that it exceeds spending limits under TABOR.

Benefits of TRANs

TRANs is being considered because it potentially could speed up the completion dates of some needed highway projects. These projects originally had estimated timelines of 48 years. If TRANs passes, those projects could be complete in as little as 10 to 15 years. Some of that time savings also comes from other funds the state Legislature has earmarked to shorten the 48-year completion date projections to 25 to 28 years. TRANs funds would reduce those shortened timelines by almost half.

There also are financial benefits of speeding up these projects. There would be savings in construction costs, which have been increasing by an average of 9 percent a year. The interest to repay the TRANs loan is projected to be about 4 percent to 5.5 percent.

Proponents of the measure point out that Colorado will get priority highway projects completed much sooner without raising taxes. This, hopefully, could reduce our traffic congestion on those highways.

Disadvantages of TRANs

While over the short-term you may see some quick improvements to our highways, TRANs is not really new or additional money for transportation. It is more like getting an advance on our state transportation “allowance” to allow us to take advantage of the potential savings created by doing these projects sooner.

This period of ready cash and quick-turn projects has local leaders worried the public may believe that all transportation-funding issues have been taken care of. This perception could make it difficult to get new funding for needs that remain.

The projects that would receive TRANs funding are not specified on the ballot and rely solely on statements from the Governor and the Colorado Department of Transportation (CDOT). In addition, none of this money could be used for local projects.

According to a list of priorities provided by CDOT, the one project that would be slowed down by the TRANs proposal is improvement of the Interstate 25 corridor from Denver to Fort Collins. Currently scheduled for completion by 2019, those improvements would take an additional three years, with completion projected in 2022.

The TRANs solution does not integrate the selected highway projects with other options and issues. It does not fund alternative transportation systems such as bus routes or passenger rail, consider impacts of land use, or provide for growth and development to “pay their own way.”

There also are financial pitfalls. Getting the money to speed up the highway project schedule creates a high demand for construction services. If the demand is greater than the construction industry can handle, it may increase prices for the work and reduce the savings the state had hoped to get from TRANs funds.

How to hear more

There are a couple of resources where further analysis of the pros and cons can be found. The state has mailed out the “blue book” describing Referendum A, which includes pros and cons from the Legislative Council. The book lists the specific projects and locations, descriptions, completion dates and estimated costs. County clerks’ offices also have mailed out a description of all the November ballot issues, including this one.

There are some clear differences about whether TRANs will be the real problem solver for our state’s traffic problems. It will become your decision on Nov. 2.

Tom Selders is a member of the Greeley City Council and chairman of North Front Range Transportation Air Quality Planning Council.

When you step into the voting booth on Nov. 2, one of the issues you’ll be asked to make a decision about is whether the state should borrow up to $1.7 billion to speed up certain high-priority state highway projects.

The loan would be placed toward acceleration of 17 of the 24 highway projects currently identified as high-priority corridors. Six of the needed projects would remain as originally scheduled, and one would be delayed under the state’s proposal to use the borrowed money.

Under the proposal, Transportation Revenue Anticipation Notes, commonly referred to as TRANs, would be issued to allow the state…

Christopher Wood
Christopher Wood is editor and publisher of BizWest, a regional business journal covering Boulder, Broomfield, Larimer and Weld counties. Wood co-founded the Northern Colorado Business Report in 1995 and served as publisher of the Boulder County Business Report until the two publications were merged to form BizWest in 2014. From 1990 to 1995, Wood served as reporter and managing editor of the Denver Business Journal. He is a Marine Corps veteran and a graduate of the University of Colorado Boulder. He has won numerous awards from the Colorado Press Association, Society of Professional Journalists and the Alliance of Area Business Publishers.
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