For citizens of Colorado, transportation is the second biggest cost, making up 17% of spending, especially averaging $15,300 a year in the Denver area. This is due to the never-ending increase in gasoline and diesel fuel fee that puts a disproportionate load on families, commuters, and businesses.
However, the bold legislation introduced by Senator Scott Bright means the elimination of these fuel-related fees. By removing the diesel and gasoline fee, the proposal is trying to ease financial strain and return this cash into the hands of Colorado’s vehicle owners.
This is part of larger efforts to fight inflation and reduce everyday costs, thus keeping transportation costs reasonable for households and businesses throughout the state. But all things aside, let’s find out more about this proposal and how it could impact Colorado vehicle owners!
Colorado’s Transportation Fees
Colorado’s transportation fees not only include gas and diesel taxes and fees, but also fees on passenger rides, vehicle rentals, and tires. Here’s a breakdown of all the transportation costs and how they are impacting the Coloradans:
Fees on Gasoline and Diesel Prices
As of 2025, Colorado drivers pay about 25 cents per gallon in federal gas tax and fees, with an additional 3-cent diesel fee being considered to help fund road maintenance. This new fee would bring in about $20 million a year and would be partly balanced by lowering the FASTER road safety surcharge by $11 per vehicle. Other current fuel fees include the Road Usage Fee (RUF) and Bridge and Tunnel Impact Fee (BTI), which is now 4 cents. But it will rise yearly to reach 8 cents per gallon by 2028.
Moreover, there’s also the Environmental Response Surcharge (ERS). This is a fee of $25 to $100 per truckload, depending on how much funding is needed for the Petroleum Storage Tank Fund. There’s also a small Fuels Impact Reduction Fee (FIRF) of about 0.6 cents per gallon. In addition, there are variable surcharges for environmental cleanup and Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS)-related costs.
Fees on Passenger Rides, Vehicle Rentals, and Tires
Colorado has introduced and proposed transportation fees to fund infrastructure and environmental projects. Already, ride services like Uber and Lyft incur a 30-cent fee per ride, reduced for carpooling or EVs, and set to rise with inflation.
Delivery services face a 27-cent fee per delivery. Short-term vehicle rentals currently cost $2.13 per day, with proposed increases to $4.13 for EVs and $5.13 for gas-powered vehicles to support rail projects. The 55-cent tire surcharge is being replaced with a $3.75 fee per tire to fund waste cleanup.
Impact of These Fees on Transportation Costs
New transportation fees in Colorado could raise consumer costs, especially in trucking, agriculture, tourism, ride-sharing, and deliveries. Critics argue the fees bypass the Taxpayer Bill of Rights (TABOR)’s voter approval requirement, though a 2024 court ruling upheld them.
Some lawmakers also suggest the state transportation department, CDOT, should better manage its $500 million budget instead. Despite this, the transportation fees are projected to generate billions over a decade, including $200 million in 2025, to fund infrastructure and environmental initiatives.
The Proposed Fee Repeal
In February 2025, Senator Scott Bright introduced SB25-117 to lower transportation costs for Colorado residents by eliminating several fees. These include charges on fuel, short-term car rentals, Uber and Lyft rides, and new tire purchases.
Bright argues these fees, meant to fund roads and environmental programs, now unfairly burden families. The proposed fee repeal includes much more. It is estimated to save big for families, having a significant economic impact on Coloradans. Here’s how:
The Proposed Fuel Cost Rebate Program
SB25-117 includes a rebate program to help offset higher fuel costs in areas that require reformulated gasoline. Run by the air pollution mitigation group, it would use 20% of its yearly fee income (10% in the first year) to give rebates based on the price difference between reformulated and regular gas. This aims to provide quicker savings along with the fee cuts.
Predicted Savings and Economic Impacts
Senator Bright’s office estimates that Colorado families could save about $4,500 a year if proposed fee repeals are approved. Savings would come from lower gas prices, no more 30-cent ride-share fees, removal of the $2.13 daily rental car fee, and elimination of the $3.75 tire fee.
Repealing these fees could lower shipping costs, reduce prices on goods, and give families more to spend, helping the economy. Cheaper rental cars might also draw more tourists. But critics warn it could create a $200 million funding gap, leading to poorer infrastructure and higher long-term costs.
How Could the Fee Repeal Affect Coloradans?
The fee repeal could affect families, individuals, businesses, and state revenue. Here’s how:
For Families and Individuals
Colorado Senate Republicans are proposing to eliminate several state fees, potentially saving families up to $4,500 annually. Savings include up to $300 from cutting the 22-cent gas and bridge/tunnel fees, and $100+ from removing the 30-cent ride-share fee.
It also consists of $45 from repealing the 27-cent delivery fee, and up to $90 from eliminating the 10-cent grocery bag fee. The fee cuts could help ease Colorado’s high cost of living by lowering hidden costs, reducing transportation expenses, and giving families more money to spend locally.
For Businesses
Repealing certain fees could bring major savings to Colorado industries that rely heavily on transportation. Trucking companies would benefit from the removal of diesel fuel fees and the $25 per truckload fee, lowering shipping costs. Farmers and ranchers could also save money, especially with the tire fee repeal.
While small businesses, like local shops and restaurants that depend on deliveries, would benefit from the end of the retail delivery fee. The tourism industry could also see a boost, as getting rid of the $2 per day car rental fee might make visiting Colorado more affordable.
State Revenue Considerations
Repealing state fees could put major strain on Colorado’s already tight budget. Some economists even say the overall impact may be small since the fees make up a small part of most budgets. The worry from business organizations may be that a mere removal of these fees might throw long-term plans and contracts into disarray.
This is especially true if those plans and contracts depend on the fees to absorb their costs. Many of these fees also support important services, like tire recycling, energy help for low-income households, and public transit upgrades. Given Colorado’s $1.2 billion underspending, a reduction in this revenue will pose an additional burden to balance the budget.
The next best solution can drive Colorado to raise taxes, cut public services, or delay vital infrastructure improvements. Over time, this could lead to worse roads, higher future repair costs, and the loss of federal funding that requires state matching. It could even risk the state’s credit rating if its financial health worsens.
Can This Legislation Pass?
In 2025, Colorado is still led by Democrats, but they lost their supermajority in the House in 2024, giving Republicans more influence. Democrats are divided between progressives focused on climate action and moderates concerned about affordability. On the other hand, the Republicans are using their stronger position to push for fee repeals, arguing it could save families $4500 a year.
They also claim many fees bypass taxpayer protections, though courts have upheld them. But instead of opposing all policies, Republicans are targeting specific fees, like HB25-1144 for delivery fees, to force tough votes for Democrats. Here’s more detail on concerns and cooperation areas between Democrats and Republicans, and prognosis:
Bipartisan Concerns and Potential Cooperation Areas
Both parties share concerns on road deteriorations and fuel costs (20-40¢/gallon higher), with Polis requesting EPA waivers. A rebate program for RFG counties could be a compromise. However, disagreements persist.
Democrats want to protect transportation funding, support EV and transit investments (approx 30% of the $5.4 billion SB21-260 funds), and want voter approval for major revenue changes. While Republicans suggest cutting other CDOT spending, they oppose EV and transit investments and favor fee-based models to avoid TABOR limits.
Legislative Prognosis
The fee repeal bill (SB25-117) was postponed in Feb 2025, but the retail delivery fee repeal (HB25-1144) may pass due to small business pressure on Democrats. Smaller fee adjustments could also be considered.
Colorado faces a $1.2 billion budget shortfall, and federal funds will decrease after 2026. Recent court rulings support Democrats, but TABOR challenges could arise. However, the 2026 elections may lead to compromises, especially on urban-rural transportation differences.
What Are People Saying About the Fee Repeal?
Senator Scott Bright, the primary sponsor of SB25-117, has been vocal about the need for the legislation. “Colorado’s transportation costs are out of control. I’m introducing a bill to repeal fees for real relief. Let’s make transportation affordable again!” he has stated.
While Governor Jared Polis maintained a neutral stance, saying, “The Governor is open to discussing any idea that could save Coloradans money… without harming meaningful efforts that make Coloradans’ lives better.”
Small business owners largely support the repeal as summarized by public representative, Dan Woog, “For companies relying on frequent deliveries, these costs add up quickly, making it harder to expand or hire workers.”
Dang Woog also shares that rural residents express particular support: “These fees disproportionately impact rural Coloradans who depend on deliveries for essentials like groceries and medical supplies.”
Advocacy groups are divided over the repeal. “The government should be making it easier, not harder, for businesses to thrive,” some say, as summarized by Dang Woog. Other environmental groups state, “Repealing these fees would undermine Colorado’s ability to maintain roads and fund clean transportation alternatives.”
What Does This Mean for Colorado’s Future?
The short-term relief from the diesel and gas fuel repeal could help Coloradans immediately as they deal with rising costs. For instance, Denver’s overall inflation is lower than the national average, but transportation costs in the area jumped 8.27%, much higher than the national rate of 2.43%. Fee cuts could ease the burden, especially for low-income and rural residents who spend more of their income on transportation.
While fee repeals could offer quick savings, they raise concerns about Colorado’s ability to fund long-term transportation needs. Losing $200 million a year would impact road repairs, bridge safety, public transit, and EV charging projects.
Key programs like tire recycling and clean transit efforts would also lose funding. Closing a $1.2 billion gap in revenue would be difficult if the state did not increase its existing taxes or cut further services. Meanwhile, persistent revenue gaps might damage the state’s creditworthiness, making it difficult to pour funds into future infrastructure costs.
Comparison with Other States’ Approaches
Colorado’s challenges reflect a national debate over how to fund transportation as costs rise. Only Colorado and Minnesota currently use retail delivery fees, while other states like Ohio and Washington have avoided them.
Though some states, like Nebraska, Hawaii, Maryland, and Mississippi, are considering similar fees. In addition, across the country, 9 states are cutting taxes, while others are adding EV-related fees to replace gas tax revenue.
California is raising fuel costs through environmental rules. Federal funding for EV infrastructure is uncertain, and Colorado could lose $57 million in it. Like many states, Colorado faces a tough balance between short-term savings and long-term infrastructure needs. Its use of enterprise fees to bypass TABOR rules is also fairly unique.
Key Takeaways
Senator Scott Bright’s bill (SB25-117) aims to repeal several Colorado transportation fees on gas and diesel. It also aims to cut costs for ride-shares, deliveries, rentals, and tires to help families save up to $4,500 a year. Supporters say it would ease costs for low-income and rural residents.
However, critics warn it could leave a $200 million gap in road and transit funding, worsen a $1.2 billion state budget shortfall, and hurt long-term infrastructure. While the full bill was postponed in 2025, some parts, like the delivery fee repeal, may still move forward, highlighting broader debates over cost relief versus funding public services.
FAQs
1. What is Colorado fuel tax?
Since 2024, drivers in Colorado have contributed 22 cents per gallon in state gas tax and 20.5 cents for diesel. In addition to this, they pay federal taxes of 18.4 cents per gallon for gasoline and 24.4 cents for diesel. Continual charges like Road Usage and Bridge & Tunnel Fees add up to the costs.
2. How much is diesel in Colorado?
As of May 2025, diesel in Colorado averages about $3.42 per gallon, putting it in the middle range nationally. Prices vary by region, around $3.31 in Denver, but are higher in mountain towns like Glenwood Springs ($3.77) and Vail ($3.64). Weekly prices have recently ranged from $3.30 to $3.47 in major cities.
3. What is a diesel fuel surcharge?
The diesel fuel surcharge is an additional fee added by trucking companies to help finance the increasing cost of diesel fuel. It’s based on a certain percentage markup for shipping rates, a certain per-mile charge (say 10-30 cents per mile).
4. Why is diesel more expensive than gas?
Diesel sells at a higher price than gasoline due to increased taxes and the need for strict regulations concerning production. It’s also due to its high usage level in trucks, ships, and the agriculture sector. Global events that affect oil supply also tend to raise diesel prices more. In Colorado, clean diesel laws and seasonal fuel blends add to the cost.
5. How much does diesel fuel cost per gallon?
As of May 10, 2025, diesel in Colorado averages $3.125 per gallon, based on AAA data.
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