7A would raise nearly 20 times CoCo’s tax-funded operating costs, CSI says

By Shaina Cole | Contributing Writer, Rocky Mountain Voice

A report out this month says Colorado’s proposed Front Range rail tax would bring in close to 20 times the share of train operating costs the tax itself would cover.

The rail district’s own August working draft of its Financing Plan identifies four recurring obligations that take priority over future construction spending.

Both documents are in front of voters deciding Ballot Issue 7A, which would fund the southern half of the Colorado Connector, the passenger line branded CoCo.

The Common Sense Institute report, written by senior research analyst Erik Gamm and released Oct. 8, finds that about a third of the people inside the taxing district live more than five miles from any planned station, that projected ridership would replace less than 0.3% of annual vehicle-miles traveled on I-25 between Fort Collins and Pueblo, measured against 2024 traffic, and that the tax would be permanent, raising substantially more each year than the service is projected to cost to operate.

The report’s endnotes cite the project’s Delivery Plan, Amtrak performance data, federal transit data and news coverage. The district’s own Financing Plan is not among them.

What 7A asks

The ballot question asks voters to raise district taxes by $295 million annually and increase district debt by $580 million, at a repayment cost of $785 million.

The rate is 0.333%, one third of a penny on a dollar, with exemptions for gasoline, food, residential electricity and gas, prescription drugs and medical supplies.

It asks for that amount annually and whatever is raised annually after that. No end date is stated. The Financing Plan projects $295 million in 2028, the first full year of collections, assuming annual taxable-sales growth of 2.5% to 3% thereafter.

Only voters inside the district decide it. The legislature redrew those lines this year under SB26-172, signed May 26. The act repealed the district’s old county-based boundaries and replaced them with a list of 31 named municipalities, the Sterling Ranch metropolitan districts in unincorporated Douglas County and provisions letting other municipalities and metro districts join by consent.

The revenue finding

One of CSI’s central findings is the gap between total tax collections and the share of operating costs expected to be paid from that tax.

The report puts the full operating cost of expanded service to Pueblo at up to $51 million a year, with $10 million to $15 million of that funded by 7A. Against $295 million in annual collections, CSI writes that overspending is arguably “a fundamental expectation behind Ballot Issue 7A.”

The plan sets four recurring obligations against that revenue.

Starting in 2029, $51.3 million a year is set aside for 25 years for the Local Return program. Communities hosting a permanent CoCo station may elect to receive a population-based allocation.

Debt service on the Phase 2 bonds runs $29 million a year for 30 years.

Total vehicle leases rise to about $27 million a year in 2033 dollars once Phase 2 opens, and grow with every phase after. About $6 million of that is Phase 1, which the plan assumes the state enterprises and RTD will cover.

Operations and maintenance for Full Service run $40 million to $51 million a year. The district’s Delivery Plan assigns $30 million to $36 million of that to the Colorado Transportation Investment Office, the Clean Transit Enterprise and RTD, leaving $10 million to $15 million to the tax.

Taken from both documents, those four obligations come to roughly $111 million to $116 million a year once Phase 2 opens. That range is RMV’s calculation. The plan designates what is left as construction money for Phases 3 through 5, targeting full buildout no earlier than 2045.

The plan describes itself as a “financially sustainable pathway.”

It also reports an average debt service coverage ratio of 15.0x, ranging from 8.6x to 24.1x. Coverage measures pledged revenue against annual debt payments. The plan describes the figure as a cushion against revenue volatility and applies the revenue above its debt service requirement to construction rather than treating it as unrestricted surplus.

What the tax buys, and when

CSI describes 7A as funding the inception and eventual operation of eight daily round trips from Denver to Pueblo.

The Delivery Plan dates it.

Phase 2, the Full Service targeted for 2032, is four daily round trips between Denver and Fort Collins and two between Denver and Pueblo. Phase 3 adds two more each way. Eight round trips south of Denver arrive in Phases 4 and 5, with an earliest date of mid-2045.

CSI’s utilization math uses that final buildout. Its estimate that seat utilization could settle below 15% assumes 3,500 daily trips, 10 round trips north of Denver and eight south. It also assumes an average one-way trip of 40 miles. CSI says a 60-mile average would put utilization closer to 21%.

Two numbers on traffic

The sharpest disagreement between the two documents is over how many cars the train takes off the road.

CSI estimates the line would displace 20.5 million vehicle-miles a year, less than 0.3% of the 6.9 billion driven on I-25 between Fort Collins and Pueblo in 2024.

It builds that from the Delivery Plan’s own 3,500 daily trips. Survey data shows 61% of rail trips would otherwise be made by car, at an average vehicle occupancy of 1.52.

The Delivery Plan projects 233 million miles of driving cut every year at full buildout, citing a 2026 study by the Southwest Energy Efficiency Project. That is more than 11 times CSI’s figure and roughly 3.4% of corridor traffic.

The plan’s own breakdown narrows the gap. Of the 126,000 metric tons of annual carbon reduction it claims, about 9,000 metric tons come from people directly switching from car trips to rail. CSI counts only that direct switching.

The campaign’s estimate that CoCo is equivalent to removing about 29,000 cars from Front Range roads comes from the same study.

How the capital figures line up

CSI cites three construction totals without saying what each covers. All three come straight from the Delivery Plan.

The Delivery Plan prices Starter Service at $332 million, Full Service at $1.7 billion and Expanded Service at $2.7 billion. CSI’s $1.7 billion is Phase 2. Its $4.4 billion is Phases 2 through 5. Its $4.7 billion is all three phases together.

The Financing Plan carries more granular figures in year-of-expenditure dollars, which run slightly higher. Phase 2 alone is $1.772 billion. Phases 2 through 5 add to $4.509 billion. All five phases come to $4.841 billion. Those last two sums are RMV’s arithmetic from the plan’s phase table, which prints no totals.

Who pays, and who gets a station

CSI estimates roughly 900,000 district residents, about a third, live more than five miles from any planned station.

The taxing district and the station list are not the same map.

SB26-172 put 31 municipalities inside the district, along with Sterling Ranch Colorado Metropolitan District Numbers One through Seven. The Delivery Plan puts 13 stations with daily service in 11 of those municipalities, plus one at Sterling Ranch. The other 20 municipalities pay the tax with no CoCo station inside their boundaries, among them Arvada, Lakewood, Englewood, Lafayette and Superior.

One of those 20 is Trinidad, which already has Southwest Chief service. The Delivery Plan funds construction of a new Trinidad station on that existing Amtrak route. Trinidad gets no daily CoCo trains, and the money becomes available two years after a successful ballot measure.

The tax also reaches people who do not live in the district. Anyone making taxable purchases inside district lines pays it.

FasTracks

CSI compares the measure to FasTracks, approved in 2004 and funded by a 0.4% sales tax close to the 0.333% now on the ballot. By 2024, 78 of 119 planned rail miles had been built, at an average the report calculates at $72 million per mile against an original $40 million estimate.

RTD Board Chair Patrick O’Keefe told the board’s annual retreat in February the agency does not have the money to finish it.

The Delivery Plan assigns RTD $156 million of Starter Service’s $332 million capital cost, drawn from FasTracks funds limited to the territory overlapping the unbuilt Northwest Rail segment, and conditioned on final board approval.

RMV reported in May that the reserve comes from that same 2004 tax.

What the model projects

CSI ran the measure through REMI’s Tax-PI model. The simulation projects 417 fewer jobs statewide and cumulative losses through 2036 of $1.23 billion in GDP and $528 million in personal income. Those are CSI’s own modeled figures.

The report also tracks rate changes. Boulder moves from 25th to 10th among Colorado’s highest local sales taxes. Pueblo climbs 38 places. Lafayette would top the district at 9.538%.

What each side says

A spokesman for Coloradans for CoCo, the campaign committee backing 7A, said in a written statement to CPR that the line is “the practical way to get more cars off the road and reduce air pollution.”

Front Range Passenger Rail District General Manager Sal Pace told KKTV the district modeled the tax so it could “bring service everywhere,” with a focus on Colorado Springs and Pueblo.

CPR reports no formal opposition committee has organized against the measure, though it notes critics speaking out online, at public meetings and in opinion columns.

El Paso County Commissioner Chair Carrie Geitner sent KKTV a statement opposing the measure. She said it would add a sales tax for a service many El Paso County residents may not use, and that residents could be paying it for a decade or more before service reaches their region.

Six Colorado professional teams endorsed 7A in a combined statement Sept. 29, the Denver Gazette reported. The Broncos, Rockies, Nuggets, Avalanche, Mammoth and Denver Summit FC.

The Delivery Plan commits the district to two permanent special-event stations, conditioned on host railroad approval, at the proposed Broncos stadium at Burnham Yard and the Denver Summit FC stadium at South Broadway and I-25. It budgets $5.1 million a year over 25 years for transit connections and related investments at those two sites.

The ballot question lists connecting travelers to sports arenas among its stated purposes.

The Financing Plan forecasts revenue and costs through 2060. After the planned 2045 buildout, it says available resources could support additional stations, expanded service, enhanced Local Return and potential extensions to Trinidad and toward the state borders with New Mexico and Wyoming.

Those border extensions are not named in the ballot question.

Ballots are out. About 835,000 voters in Douglas, Adams, Arapahoe and Weld counties received 7A by mistake, and Arapahoe County is separating the valid votes by hand.