CDOT Faces $2.3B Budget Gap As Fuel Tax Revenues Stay Flat

Aspen —The air in the conference room is probably dry, recycled, and thick with the kind of quiet that settles over a table when numbers stop adding up. It’s October, and while the aspens along the I-70 corridor are likely turning gold or already bare, the conversation inside the Colorado Transportation Commission is turning a shade of gray. The question on every driver’s mind, whether they’re idling in traffic on the 82 or merging onto the 9, is simple: with a $2.3 billion budget for fiscal year 2028, why does the state’s road system feel like it’s slowly coming apart?

Bethany Nicholas, deputy chief financial officer for the Colorado Department of Transportation, stood before the commission on Oct. 15 to present the draft budget. She didn’t offer a list of shiny new projects or promises of faster commutes. Instead, she offered a diagnosis. “Our revenue situation has gotten more and more complex over the last many years,” Nicholas said. It’s a statement that lands with a dull thud, the kind of bureaucratic phrasing that often masks a much sharper reality.

If you look closely at how the money flows, you can feel it: the engine is stalling. About one-quarter of the state’s transportation revenue comes from enterprise funds like the Bridge and Tunnel Fund, which operate on specific fees. Roughly 35% comes from federal programs, including the gas tax. But the lifeline, the Highway User Tax Fund which accounts for about 30% of the budget, is flat. Nicholas explained that this stagnation isn’t just bad luck; it’s a direct result of vehicles getting more fuel-efficient. We are driving fewer miles, or burning less gas per mile, which means the state collects less in fuel taxes even as fee rates increase. “We’re really seeing fairly flat revenues, not much growth going into (the fiscal year),” she said.

This is the friction point for neighbors across the valley. Inflation is outpacing a budget that has remained relatively flat in recent years, as several commissioners noted during the work session. The draft budget plans for $97 million from the state’s general fund, a restoration of funding that had been temporarily reduced in past years. But Nicholas warned that the state is likely to face a major budget deficit again this year, which could lead to reallocation. In other words, the money isn’t guaranteed until it’s actually in the account.

On the spending side, about $914 million — roughly 40% of total expenditures — is earmarked for capital construction. Another $460 million, or about 20%, goes toward ongoing maintenance and operations. The rest is split among suballocated programs, which Nicholas described as “pass-through” funds. It’s a pie that is being sliced thinner and thinner, even if the total dollar amount looks stable on paper.

The fiscal year 2028 begins on July 1, 2027. That’s a long way off in calendar time, but for a pothole on your daily route or a bridge that’s been marked with caution tape, it feels like forever. The commission advises on policy for CDOT, but the real test will be whether these flat revenues can cover the rising cost of materials and labor.

Outside, the wind picks up off the plains, rattling the windows. The budget is a document of intent, but out there on the asphalt, it’s just another day of navigating cracks that seem to grow a little wider every time you drive over them.