While the U.S. automotive industry is often associated with Michigan and other Midwestern states, it has a direct and major impact on Colorado’s economy.
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, as demonstrated by the following 2009 data compiled by Auto Outlook.
As the automotive industry rebounds from the recession, these economic impact and tax revenue numbers will likely climb. This 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.
It’s logical to assume that a similar percentage is paying for Fastracks, which is funded by a metro-area sales tax. In other words, without cars, Fastracks would have roughly 20 percent less sales tax revenue to subsidize its costs.
Developing a multimodal transportation system is a worthy goal but cars and trucks must remain an important part of that mix. While light rail can spur development, residential and business transportation needs don’t always align neatly with transit routes. And, ironically, 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. From a public policy standpoint, the quickest, most dependable and tested source for multi-modal transportation funding is taxes on the fuel that powers a gasoline and diesel vehicles.
While vehicles powered by internal combustion engines make up the vast majority of the current fleet, they have evolved dramatically. Today’s vehicles are powered by a growing array of energy sources, including ethanol, natural gas, electricity and clean-burning diesel. This technology, combined with efficiency and emissions technology breakthroughs, means that new cars and trucks will remain as a predominant pillar of our economy while reducing their impact on the environment.