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Colorado Looks To Rental-Car Fee To Fund Passenger Rail Projects

Above photo: Colorado Gov. Jared Polis speaks at Denver Union Station prior to a March 7 inspection train trip over part of the proposed Front Range Passenger Rail route. Office of Gov. Jared Polis.

Legislators plan to introduce bill that could generate $50 million annually.

Denver, Colorado – Colorado legislators plan to introduce a bill that will increase the state fee on rental cars by $2 to $3 per day to help pay for proposed passenger rail service along the Front Range and to Craig, Colo., the Colorado Sun reports.

The fee would generate as much as $50 million annually, which the state would use for matching funds for federal grant programs — specifically targeting the $60 billion for rail projects in the Infrastructure Investment and Jobs Act.

“I really want to make sure Colorado gets some of that money,” state Senate President Steve Fenberg (D-Boulder) told the Sun. “I don’t want it all to go to the Northeast. I don’t want it all to go to California. I want to make sure that Colorado gets its fair share.”

Fenberg was among the passengers on a March 7 inspection train arranged by Colorado Gov. Jared Polis over part of the proposed Front Range route, which seeks to develop passenger service between Pueblo and Fort Collins, Colo. [see “Colorado officials ride inspection train …,” Trains News Wire, March 7, 2024]. The state said last year it would study Denver-Steamboat Springs-Craig service, a 191-mile route that last saw daily operation in 1968 [see “Colorado to fund study …,” News Wire, Oct. 24, 2023].

The state already charges a $2.13 daily fee on rental cars; the proposed bill would increase that to $4.13 for electric vehicles and $5.14 for gas-powered vehicles as of January 2025.

The fee is likely to be the most politically acceptable method of funding because it does not require voter approval for a tax increase and will mostly place the financial burden on out-of-state visitors rather than Colorado voters. Many states impose rental-car and hotel taxes for similar reasons.

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