With the build of a football lineman and the grit of a rancher, Republican Sen. Byron Pelton gripped the steering wheel of his truck and pointed toward the highway ahead — a stretch of road that runs through the heart of his district in the Eastern Plains.

“Do you see how bad this is?” Pelton asked. “My brother-in-law served two tours in Iraq, and he says he drove on better roads over there than he did here.”

The pavement along Colorado Highway 63 sat uneven, the asphalt worn down and splitting apart from the wear of semi-trucks and stock trailers. Black patches — potholes that had been filled — ran perpendicular to the painted yellow stripes, laying every few feet along the stretch of highway.

Pelton, who lives in Sterling and represents a handful of counties in the northeast corner of the state, said he frequently uses the roadway to transport cattle between his home and Strasburg, a two-hour round trip.

Every year, he blows a tire or two on his journey due to the conditions of the road, he said.

“When they talk about the rural-urban divide, the conversation begins right with the roads,” Pelton said.

Rising costs, stagnant funding

Colorado highways across the state are falling into disarray. Gas tax revenue to fund upkeep has flattened while the cost to maintain and build roads has soared, industry experts said.

The state also stripped its infrastructure improvement fund to help plug a $1 billion shortfall in the 2025-26 budget.

In March, the state’s Joint Budget Committee slashed more than $140 million initially allocated to the Colorado Department of Transportation (CDOT) for infrastructure improvements, including more than $65 million of state highway funds.

While most state departments saw budget reductions due to the deficit, CDOT’s funding suffered the most at a time when, many said, Colorado’s highways are in significant need of repair. 

In March, the Reason Foundation — a nonpartisan public policy research think tank — published its annual national highway report. Among all 50 states, Colorado’s highway system ranked No. 43 in the country in terms of cost effectiveness and condition.

The quality of Colorado’s highways has not always been so poor compared to other states. But Colorado has experienced a steady decline since 2018, when the state was ranked No. 31.

On its 2022 Transportation Asset Management Plan, CDOT estimated that it would need an additional $284 million annually to bring 80% of the state’s pavement up to a “high” or “moderate” drivability life within the decade.

That estimated need makes up nearly a quarter of the department’s $806 million 2025-26 capital construction budget, which includes all 10-year plans, according to a CDOT budget presentation from March.

Since 1991, most of Colorado’s highway funding has come from the state’s motor gas tax of 22 cents per gallon, with the collected revenue deposited into the state’s Highway Users Tax Fund (HUTF).

The HUTF acts as a collection point from which money is distributed into the State Highway Fund, as well as local cities and counties for their roadway projects, such as repaving a town’s main street.

But that tax rate has not increased in nearly 35 years, even with inflation and a lot more vehicles on the road.

While the state’s gas tax income has increased by about $100 million since 2002, Colorado’s total vehicle registrations have more than doubled over the same time frame, according to data from the Bureau of Transportation Statistics.

As a result, the state’s annual gas tax revenue per registered vehicle has dropped by more than half over the past two decades — a decline made worse by the growing number of fuel-efficient and electric cars, which also reduces the amount of tax revenue collected.

In addition to a more than 50% drop in per-vehicle gas tax revenue over the past 20 years, recent inflation in construction material and labor costs has significantly reduced the purchasing power of that revenue.

“Since 2021, we’ve had about 46% construction cost-indexed inflation,” said Tony Milo, executive director of the Colorado Contractors Association. “The money is only going half as far as it used to four or five years ago.”

A patchwork of solutions

Contractors play a significant role in the state’s roadway infrastructure projects.

By state law, CDOT cannot use its maintenance staff for projects costing more than $250,000, instead sending them out for contractors to bid, said CDOT’s Region 4 Director Heather Paddock.

“It’s a lot more expensive for us to hire out contractors, but they can do the jobs faster, they have more resources, they have heavier equipment,” Paddock said. “Those $5 million jobs to the $500 million jobs, we don’t have the staff to source anything like that.”

Between a lack of staffing and declining HUTF revenue, CDOT cannot fully complete many roadway projects, Paddock said.

“I might have $7 million programmed for a project where we want to get 12 miles done, but when we look at it, we can only do about five miles with the money we have,” Paddock said. “We could pull funds from another project, but if we do that, then we’re killing it to add to this one.”

In areas where CDOT cannot fully complete roadway projects, rural state highways are now becoming a patchwork of various asphalts, each with a base of deteriorating grey pavement occasionally interrupted by a few hundred feet of fresh, black overlay.

The inconsistencies have left some county commissioners, who rely on CDOT for funding their roadway repair projects, fuming over the lack of funds for repairing the state’s mountainous highways.

“I’m absolutely sick of what’s going on with our CDOT right now,” said Yuma County Commissioner Scott Weaver. “The roads just keep deteriorating, and we don’t have the money to spend on maintenance to keep up.”

The issue of providing additional sources of road and bridge funding is not new to Colorado.

The lack of funding for state roadways has plagued Colorado for decades. Voters had rejected multiple transportation initiatives in 2018 that would have specifically provided bond funding to roads and bridges.

Another bond issue initially slated to appear on the 2019 ballot was delayed twice until 2021.

In 2021, the state legislature passed Senate Bill 21-260, a bill aimed at providing long-term, consistent funding to support roadway construction and maintenance across the state through the creation of different revenue streams.

Under the 163-page bill, more rural areas of the state would receive long-term funding dedicated solely to roadway infrastructure, with some of it going to environmental mitigation efforts.

“(The previous bill) gave CDOT some significant one-time funding,” said CDOT Communications Director Matt Inzeo. “One of the things that the 2021 legislation did was follow that big, one-time funding with something that is sustained and growing over time.”

The 2021 bill created four state enterprises involved in funding, developing, maintaining, and supervising various transportation-related initiatives, including road and bridge projects, transit programs, and “environmental sustainability.”

The bill also imposed an array of fees indexed to the national highway construction cost index inflation, allowing them to increase in conjunction with the rising costs of highway materials, with the revenue primarily dedicated to the Highway Users Tax Fund.

• One set of fees was imposed on electric motor vehicles for vehicle registration and road usage.

• Another set was leveled on gas-and-diesel sales, running in conjunction with the standard gas tax, phased in over a decade from fiscal years 2022-23 through 2031-32, with the fees being adjusted at that point to generate the same amount of revenue that would be generated by indexing the existing taxes to the construction cost inflation.

• Additional fees would be imposed on deliveries from motor vehicles that include personal property subject to the state sales tax, collected by the seller from the buyer of the product.

• Gas taxes still made up nearly half of CDOT’s $1.4 billion budget in the 2024-25 HUTF budget, according to a department budget presentation. The combined income from the vehicle registration fee, road usage fee and retail delivery fee made up an additional 31%.

• Fees from the FASTER program — enacted in 2009 to provide additional funding for state roadway safety — make up about 17% of the overall revenue.

The bill also included several immediate transfers of money from the state’s general fund to CDOT’s highway funds and set up additional transfers to occur annually between 2024 through 2031.

Each transfer from 2024 through 2028 is scheduled to include $100 million in state highway funding, 10% of which is explicitly designated for environmental mitigation. The amount was then expected to be lowered to $82.5 million each year by 2031.

But in March, some of those scheduled transfers fell victim to the Senate Joint Budget Committee’s quest to solve a $1.2 billion state budget deficit.

Lawmakers trimmed the 2025 transfer by over two-thirds to $32.5 million. They also cut the 2026 transfer by almost half at $50.5 million.

To make up for the loss, the committee added one more transfer of nearly $65 million in 2032, restoring the total amount of expected money to the same level as before March’s cuts.

Still, the short-term ramifications of cutting the 2025 and 2026 transfers worried the contractor’s association, which, after the new budget was finalized, released a statement expressing disappointment with the cuts.

“We understand the need to balance the budget, but balancing it on the backs of an already crumbling transportation system will only make things worse — and more expensive,” Milo said in the statement.

Legislator Pelton said that he believes the only way for the state to dedicate enough funding for widespread highway infrastructure improvements would be through another bill, something he doubts would succeed given the legislation’s current partisan split.

He underscored that rural roads serve Colorado’s billion-dollar agriculture economy. 

“We can’t fix our roads even though it’s a $47 billion industry of agriculture, the second largest economic driver in the state,” Pelton said. “That’s why we’re all pretty frustrated.” 

Local agencies pick up maintenance operations 

Colorado’s varied geography — from mountainous passes to level plains — makes the state’s terrain relatively inhibitive to roadbuilding compared to other parts of the country.

Within the state, extreme temperature swings can sometimes occur within a few hours, sometimes allowing for water to quickly freeze overnight, even during warmer parts of the year.

“We have a massive freeze-thaw cycle here in Colorado,” said Andy Heiber, a professor at Colorado State University and longtime veteran of the state’s road construction industry. “Especially in rural areas where not all snow and everything is removed quickly, that cycle is exacerbated.”

With that cycle being more pronounced in Colorado, it also leads to more damage more quickly on roadways that are not properly maintained, Heiber added.

“There’s a sweet spot on all roadways where you should do maintenance,” Heiber said. “You can get put into a box in a hurry (because) you’ve got to be on a five-year plan, if you’re not in the plan, there’s no chance you’re going to get funding for that roadway.”

In addition to teaching, a role he just began in the past year, Heiber works for a company called Rock Salt Consulting Group, which helps staff engineers and inspectors on roadway infrastructure projects. One of the company’s largest clients is CDOT.

From his position, Heiber noted that he’s seen a significant shift in the way that CDOT has handled state highway maintenance in recent years.

“I used to see eight to 12 projects out of the up-north-part of CDOT that were pure CDOT roadways,” Heiber said. “This year, I was just talking with a co-worker. We’ve got about four CDOT projects but 10 local agency ones. Those local agencies are the ones handling those rural highways a lot of the time.”

Part of the reason is that CDOT’s responsibilities for maintaining the roads include a variety of tasks not directly related to the pavement’s condition, Paddock said.

“When you look at our maintenance budget, my region has about $40 million annually to tackle 6,700 lane miles,” Paddock said. “In addition to doing pavement repairs, what they spend a lot of time doing is plowing snow, replacing guardrails, mowing grass, refreshing striping … they’ve got a lot of duties.”

Paddock added that the department receives a high volume of phone calls every spring after the freeze-thaw cycle ends and the cracks have turned into potholes. He said that, ultimately, they will prioritize projects that allow them to spend efficiently.

“We try to put dollars to either the areas with the worst conditions first or where we can get the biggest bang for that dollar, asking what treatment will give us the longevity we’re looking for,” Paddock said.

Local agencies having a heavier hand in roadwork makes sense to Pelton, who noted that the awareness of CDOT’s lack of transportation funding has led to skepticism in rural communities that the department will be able to finish projects.

“Our No. 1 job as a local municipality is to keep roads and infrastructure in working condition,” Pelton said. “That’s our economy, especially out here in these rural areas.”

East of the state’s Front Range, rural parts of Colorado are heavily reliant on agriculture for their economies.

Colorado is ranked No. 5 in the country for cattle and third for sheep and lambs, with several crops — barley, beans, and potatoes, to name a few — also in the top 10 list nationwide in terms of production, according to a report from the U.S. Department of Agriculture.

Not only are the roads traversing eastern Colorado crucial to an agricultural economy that relies on them for transporting goods, they tend to deteriorate more quickly due to the weight of the vehicles routinely driving on them, when compared to roads in the Denver metro area, Paddock said, who also noted that only a limited number of roads connect eastern Colorado cities and counties.

“I will be honest, we just don’t have enough dollars to actually aggressively tackle the problem that exists out there,” Paddock said.

A rocky road ahead

Even without the JBC’s cuts to CDOT’s budget, the department would still have fallen about $100 million short of the money needed just to maintain the condition of its existing roadways, let alone reconstruct ones that have fallen below a proper maintenance threshold, officials and others in the industry said. 

Two ballot measures proposing additional funding for the state’s roads, bridges and highways could be headed to the ballot next November. They will be introduced as constitutional amendments, requiring 55% of the vote to pass.

For Milo, delaying more funding for CDOT’s roadway projects allows legislators to further kick the can down the road.

“The longer we put off maintenance of our roads and bridges, the more expensive it becomes every year,” Milo said. “It’s going to cost more when we do get to it, and it’s going to have long-term effects on Coloradans.”

Editor’s Note: This is the fourth and final set of a series examining Colorado’s urban-rural relationship. Follow all the stories in the series here.