The Denver Metro Badger

Colorado transportation agency proposes $90 million federal shift amid revenue shortfalls

The Colorado Department of Transportation wants to redirect federal highway funds to three broad 10-Year Plan categories as state and federal revenue comes in below budget.

Published Colorado
Construction-phase photograph showing temporary steel supports beneath the US 85-to-C-470 flyover during emergency bridge repairs.
Construction-phase photograph showing temporary steel supports beneath the US 85-to-C-470 flyover during emergency bridge repairs.

The Colorado Department of Transportation is proposing to redirect $90 million in federal highway funds to its 10-Year Plan after reporting a $19.609 million shortfall in regular Highway Users Tax Fund revenue and a $4.319 million reduction in flexible federal funding.

The Transportation Commission is scheduled to consider the proposal Sept. 17. The commission’s September meeting packet presents the measure as a proposed action, not a completed vote.

The proposed funds would be divided among three broad categories: $40.5 million for capital asset management, $40.5 million for capital mobility and $9 million for multimodal projects. The proposed resolution does not identify individual projects that would receive the money.

Regular Highway Users Tax Fund revenue totaled $518.848 million in fiscal 2025-26, compared with a budget of $538.458 million. The department attributed the gap to lower-than-expected fuel-tax revenue as statewide fuel consumption declines and to electric-vehicle registration-fee revenue coming in below forecast.

The department also reported $4.319 million less in flexible Federal Highway Administration funding than expected: $3.508 million from the National Highway Performance Program and $811,000 from the flexible Surface Transportation Block Grant Program. A $5.4 million increase in other flexible state revenue partly offset those reductions.

Budget materials project a Transportation Commission Program Reserve balance of $141 million after the revenue reconciliation, proposed roll-forwards and federal redistribution. After other proposed uses totaling $92.2 million — including the $90 million for the 10-Year Plan — the reserve would be about $48.8 million, near the department’s stated goal of approximately $50 million.

The department said reduced General Fund transfers totaling $117.3 million across fiscal years 2025-26 and 2026-27 could affect planned 10-Year Plan delivery schedules without replacement funding. It presented the one-time federal redistribution as a way to help maintain those schedules, but the materials do not specify which projects would otherwise be delayed.