snake oil

Snake Oil: As believable as some of the highway funding claims from the Colorado GOP

There is one universal characteristic to a prolonged sales pitch – dogged repetition – and Colorado Republican politicians have donned their finest car salesman plaid pants to sell the notion that we can fix the $9 billion Colorado transportation shortfall without raising taxes. Please follow me as I illustrate this snake-oil snow job regarding asphalt and concrete with a story about burgers and beers, since let’s face it – burgers and beer taste better.

You Can Get Anything You Want: But Not For Free

Arlo

Guessing Arlo Guthrie couldn’t care less about Colorado roads, but he wrote “Alice’s Restaurant” (Photo: Adam Hammer, St. Cloud, MN)

Alice’s Restaurant (not its real name) sells a quarter-pound cheeseburger and a side for $11.99 in 2018, after charging $10.99 in 2017. Alice’s reached this price as a result of serious analysis, since this revenue is a major part of what it takes to cover food cost, labor/management cost, building rent, equipment purchases and maintenance, utilities, insurance, advertising, side items like napkins and to-go boxes, and whatever else it takes to run an eatery. They use quality beef and do good business, but their costs are increasing so prices have to come up.

However, for years Alice’s has sold mediocre beer, and they’d like to offer good Colorado microbrews since that’s what the competition offers and it’s popular. As a result, Alice’s is considering higher beer prices, with an eye on what neighboring restaurants charge since they must remain competitive to retain or grow their market share.

Cheeseburger

Everything in this pic costs something – the pepper flakes, the plate, the onion bits – so the restaurant has to charge a fair price if it wants to pay its bills. (Photo by jeffreyw)

How would Colorado GOP transportation talking points work in this situation? First, they’d send an opinion piece to local media claiming that the $11.99 cheeseburger price and other food revenue proves that the restaurant has “plenty of money,” without ever telling the reader about what Alice’s is using the money for (food/labor cost, etc., all as detailed above). After all, new pricing and higher volume (partially because more people have moved to Alice County) is part of why 2018 is on pace to generate the most food revenue Alice’s has ever taken in. This is a parallel to the GOP’s lockstep messaging that the overall state budget is the highest it’s ever been in total dollars. Again, they avoid emphasizing the reasons for state budget growth such as inflation, population growth, strong business performance, resource cost, federal mandates and contributions, subsidies to rural school districts with low local tax revenues, health care costs, and other factors.

Beer fermentation

We all get a free beer time to time, but the hardware, ingredients, and labor all bear a cost. (Photo by TJ Blackwell)

Next, GOP messaging ignores that Alice’s existing beer prices are inadequate to meet the demand for better beer – as it glosses over how CDOT’s existing revenue stream is basically insufficient to cover the new construction this 104,000 square mile mountainous state needs. The controversial Denver I-70 project through Globeville and Elyria/Swansea alone is estimated to cost more than $2.2 billion over 30 years, and that’s not touching the I-70 mountain corridor in which traffic accelerates to glacial speed on weekends, or congestion relief projects along the ever-growing Front Range, unexpected flood washouts or rock slides, or necessary rural highway improvements.

So, the current GOP philosophy basically offers two ways Alice’s can sell its customers better beer without raising prices (or better roads without increasing taxes/fees). First, like the GOP proposes every year with transportation bonding, it decides that Alice’s can borrow a whole bunch of money to buy high-quality kegs, keep beer prices the same, then pay back the loan with interest over time rather than charging a fair price upfront from customers who will be drinking the beer (i.e., using the roads). Of course, Alice’s management (substitute Colorado Department of Transportation) doesn’t want to do this, since interest payments will crowd out funding for hard goods or staffing that they need to do their jobs.

Second, the GOP proposes that Alice’s can just raid funds from food revenue or cut costs in food production, so it can offer great beer at low prices despite its inadequate beer revenue. Alice’s management doesn’t want to do the things this approach calls for – lower-quality meat, cutting portion sizes, slashing wages or benefits for good employees, delaying maintenance or equipment purchases, laying off staff – and to boot, the GOP hasn’t made a good case as to why these moves won’t hurt business in the long run. It also doesn’t make a good case in real-life public discourse about how cutting other Colorado state departments won’t damage performance. The logic is closer to “because I said so” than giving the people any sort of measured analysis, or giving voice to the departments they might cut so they can show Coloradans the inevitable consequences.

Money Ain’t Magic: Detail Matters

I-70

If you live in Colorado, you’ve been on I-70 when it grinds to a halt. All we have to do to fix it is blast some mountainsides with explosives, close lanes on Colorado’s most important east-west corridor during years of  construction, and spend billions, all without raising taxes. (Photo by I-70 Coalition, posted on RealVail)

Let’s set the beer aside for a few minutes – the following gives some tangible reasons why the GOP notion that you can fix a huge transportation shortfall by raiding existing departments is futile, folly, and fantasy. Six state departments (AKA the “Big Six”) take up 86.9% of the entire state budget (FY 2017-18 numbers since the 2018-19 budget hasn’t passed yet). Since Transportation is one of the Big Six, only five other departments remain where incremental cuts (not whole-scale slashing) might provide enough funding to pay for a few significant projects. Of course, the GOP isn’t demonstrating with any precision where cuts large enough to fund major projects should come from, they’re not being upfront about tradeoffs, and here are a few of the problems:

* K-12 Education: The state passed Amendment 23 in the year 2000 to protect K-12 funding, but thanks to the recession and a recession-era invention called the “negative factor,” K-12 funding remains roughly $800 million below the A-23 formula. Caution – proposing additional cuts will lead to more mild-mannered protest from education advocates, perhaps even vigorous sign-waving. Cutting K-12 would also be shortsighted, since it educates, protects, transports, coaches, feeds, and counsels Colorado kids who don’t drop out – without regard for parental income – and helps prepare them for adulthood.
* Higher Education: Colorado’s state support for public higher education per capita consistently ranks among the lowest in the nation (try Table 9 in this link), whether it’s 47th, 48th, or 49th out of 50 states. You just can’t go much lower, and you shouldn’t try if you care about “the future.” Access to higher education is key for the future of students who are not from families of great wealth; it’s vitally important to our aggregate economy and society since it directly trains students for productive careers and fosters innovation; and it exposes students to the most successful individuals and organizations our society has to offer, past and present.
* Health Care and Human Services: Medicaid helps poorer Coloradans afford health care, a human need even if you don’t believe it’s a right, and there’s a big federal contribution – which we all know (ha!) counts as part of the state’s total budget number. In fact, federal funds make up about 60% of the state’s Health Care Policy and Financing budget. Meanwhile, the state has human services issues with addiction, homelessness, single parenting, providing services for people with disabilities, and other problems a humane state ought to address. It’s an awful place to look for major cuts, especially if politicians proposing cuts don’t explain what ought to be on the chopping block and why.

Glenwood bridge

Anyone who went to Glenwood Springs last year knows parts of the town were torn up during recent construction, and the work was demanding and costly.

* Corrections: The entire 2017-18 Department of Corrections budget was about $864 million. For perspective, using the money from a 10% cut here wouldn’t quite cover 3/4 of the recent Glenwood Springs Grand Avenue Bridge project. In exchange, you’d cut into staffing/salaries, infrastructure/security needs, and/or programs for a department that literally protects our public safety.
* Judiciary: Like Corrections, Judiciary’s $710 million budget would have to face unacceptable cuts to make a tiny dent in our transportation shortfall. The judicial system depends on hiring professionals in a competitive world – many of whom have law degrees and command good pay – who in turn make vitally important decisions on the future of those accused of crimes, and on restitution or closure for the aggrieved. It would be a silly idea to look here for substantial budget cuts. Plus, Corrections and Judiciary combined only accounted for about 5.5% of the state’s 2017-18 budget.

Jamestown

The 2013 Colorado flooding didn’t just rip up pavement – near Jamestown, it tore some of the road subsurface all the way down to the level of the riverbed

Let’s get extremely tangible here – transportation improvements have an undeniably strong correlation to availability of funding. If you have a billion dollars available over the lifespan of a project, you can do a billion-dollar project, and if you don’t, you can’t (borrowing and public-private partnerships count as availability, though interest adds to the cost). I’ve done summer road maintenance – it’s hard physical work in hot weather with a certain amount of danger. I wanted to be paid fairly for this hard labor; and I never ever want to touch a jackhammer again. My wrists and hands tremble just thinking about it. There are non-theoretical costs involved for concrete, asphalt, rebar, steel beams, pedestrian and bike facilities, engineering, plowing snow and de-icing, avalanche and rockslide control, striping, right-of-way mowing and landscaping, trucks and heavy equipment, signs and lighting, and so much more. On top of that, new roads and bridges have a limited lifespan and will face inevitable costs for maintenance and replacement over the years.

This, anti-tax trippers, is stone cold sober reality.

Beware of Partisans Bearing Candy

Of course, political parties have an obligation to make positive claims about their ideas and to trash their opponents, in the interest of gaining the public’s long-term allegiance. You, the reader, should probably never believe most of these claims, and your parents probably already taught you to be wary of strangers giving away candy. In the case of the Colorado GOP, they’ll claim to be the party of transportation, despite:

* Not having a good plan to pay for anywhere close to the full volume of needed improvements or fund probable longer-term needs (see entire piece above if you’ve forgotten)
* Opposing the FASTER bill that has rebuilt or repaired 132 bridges throughout the state (hint: bridges are kind of an essential part of transportation when you have rivers, overpasses, and vertically-uneven topography). Fun fact: the Colorado Constitution (Art. 10 Sec. 18) specifically defines registration fees, which were called “registration fees” before FASTER, as a legitimate source of transportation funding. FASTER was passed the year after the tragic bridge collapse in the heart of Minneapolis, and at the time, some of Colorado’s bridges rated as low as 9 on a scale from 1-100 in terms of structural/functional sufficiency.

Union Station

Thousands of people board buses, shuttles, and trains at Denver Union Station every week, keeping cars off roads and out of finite parking spaces

* Frequent opposition to including transit items as part of transportation bills, despite transit’s widespread use in metro areas throughout the Western world, which helps manage congestion and reduces demand for parking structures or street parking spaces in crowded urban areas.
* Blocking the SB 17-267 fix that could have been remedied in the 2017 special session, despite the oversight permanently costing RTD (a transportation agency, even if it’s the dreaded transit) about $1/2 million per month.
* No effective leadership among GOP legislators to push for a change in a state fuel tax that hasn’t increased since 1992, despite recent gas tax increases in 22 states to fund transportation improvements – including red states like Wyoming, Utah, Nebraska, and Indiana. Recently, the notable socialist hotbed that is Kentucky released a bipartisan proposal for increased gas tax and fees on hybrid/electric vehicles (they use less or no gas) to pay for their roads!

Transportation: Can’t Move Forward Without Funding

Milk Stout

I’m not ready to endorse a ballot measure, but will endorse this beer any day over mega-mass-produced taste-challenged domestics

So, what’s the solution? Back to beer – when I go out for a cold one and want quality, the tavern will probably charge a fair price to cover their expenses. In my opinion, a modest tax increase for transportation is also a fair, appropriate action. I won’t endorse anything at this moment, but a coalition in league with the Denver Metro Chamber of Commerce intends to run a ballot measure for a tax increase for transportation this year, and they’ve had four different initiatives drafted for consideration.

In fairness, there are a few legitimate possibilities for limited transportation projects without new state taxes, but let’s be clear – they’re not stable long-term solutions. If there are short-term state windfalls due to the new federal tax structure, by all means spend a substantial chunk of it on transportation without a tax increase, but please don’t try to tell me that K-12, higher education, and capital construction don’t also have a fair claim to some share of the money, since they too have been neglected. If a Trump federal transportation plan can provide Colorado with some funding, it might allow for certain projects without a tax increase (until federal deficit spending finally catches up with us, and it will). However, it seems likely that Colorado would have to show it can provide heavy matching funds to earn a grant, and it’s tough to realistically envision our current fiscal structure allowing for availability of serious matching money without an increase in revenue.

In conclusion, I hope I’ve presented a decent case as to why proposing to raid other state departments for transportation is more partisan framing than a realistic, comprehensive, and beneficial plan. Still, there’s always the chance that Jon Caldara of the Independence Institute will run an initiative to counter the Chamber in 2018, called “Fix Our Damn Roads,” of course through bonding with interest and reallocation of state departmental budgets, without new revenue. I won’t endorse a Chamber measure just yet, but if you’re presented with a petition for FODR, I’ll say don’t sign it and try to keep the damn thing off the ballot. If it gets on the ballot, stop the damn thing from passing.

It’s time for partisan politicians and think-tank tacticians to get real about what it really takes to fix roads – the labor, the materials, the heavy equipment, the engineering – and stop trying to sell us this magic fantasy of shiny new roads that nobody has to pay for.