New car sales fund highways and alternative transportation

As political candidates debate who will do the most to create jobs, it’s worth taking a moment to reflect on the role of new car dealers in employing Coloradans.

While the U.S. automotive industry is often associated with Michigan and other Midwestern states, the service and sale of new vehicles has a direct and major impact on Colorado’s economy and the state’s ability to provide public services.

Even in 2009, a historically challenging year for new car sales, 26,470 Colorado jobs were directly or indirectly attributable to new vehicle dealerships, according to research conducted by Auto Outlook Inc., an independent research firm, on behalf of the Colorado Automobile Dealers Association.

That amounts to more than one out of every 100 nonfarm jobs in the state. These Colorado employees attributable to new vehicle dealerships’ sales and service earned almost $1.5 billion last year.
New vehicle dealerships also made a huge impact on state and local tax revenues last year with more than:
• $250 million in state sales taxes.
• $38 million in state and local payroll taxes.
• $122 million in real estate and other local taxes.

As the automotive industry rebounds from the recession, these economic impact and tax revenue numbers will climb. The Auto Outlook research, conducted every two years, shows that employment, payroll and tax revenue numbers were all higher in 2007 than last year, which will go down as among the automotive industry’s worst years ever.

The above figures reference only new car sales and service. The impact grows when used cars are thrown into the mix. Historically, according to Colorado Department of Revenue data, more than one out of every five sales tax dollars collected by the State of Colorado comes from the sale and/or service of new and used cars. Ironically, vehicle sales and service also support alternative transportation.

The Fastracks public transit project is funded by a metro-area sales tax. That means that, without cars, Fastracks would have roughly 20 percent less sales tax revenue to subsidize its costs. In addition, gas taxes are a significant source of federal mass transit funding.

Fuel taxes paid by drivers also help defray the costs of bike lanes and trails. When we bicycle, we use the lanes for free. But, when we buy and refuel our cars, we are paying for highways, bike trails and mass transit.

The bottom line is that the automobile industry is a primary engine that drives the Colorado economy.

Tim Jackson is president of the Colorado Automobile Dealers Association.


About timwjackson

Working every day for a better Colorado.
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1 Response to New car sales fund highways and alternative transportation

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