If anyone were running a profitable business the way the state of Colorado operates, they would be out of business immediately. Colorado has created new programs that now lose ten dollars for every dollar in revenue. What does this mean for your taxes, real estate, and the state of the Colorado economy? Is Bustang the reason your property insurance bills are skyrocketing?
What is Colorado Bustang and why should you care?
Bustang is Colorado’s solution to create a public transportation network to connect Denver to Steamboat, Granby, Glenwood, Grand Junction, etc… The bus operates at reduced fares to subsidize transportation to these communities. For example for the same trip on Greyhound it costs 75 dollars versus 15 dollars on Bustang
The Bustang fiasco losing millions every year for taxpayers
The state’s costs for the privately contracted services have risen at the same rate as the number of passengers. Colorado will spend $47.8 million on the Bustang system in the 2027 fiscal year that starts July 1. Yet it projects to take in only $4.4 million in fares.
A state law in 2022 gave CDOT $30 million over three years to expand Bustang routes and frequency. The federal American Rescue Plan Act provided another $35.1 million for Bustang starting in 2023. Those subsidies come to an end in fiscal year 2027.
The projected Bustang deficit for 2027 is $25.3 million, rising to $34.6 million in 2030, if current route and schedule levels stay the same, according to CDOT presentations to state transportation commission workshops.
Bustang highlights a philosophical problem in Colorado
Bustang is the tip of the iceberg and highlights the philosophical problems facing Colorado. Should every Coloradoan be on the hook for 35 million in order to subsidize low cost transportation to places like Steamboat or Breckenridge or Vail or Glenwood Springs?
It seems insane to spend 35 million on low cost transportation to ski towns when the Colorado budget deficit is bleeding and legislatures are threatening cuts to education, health, etc… Remember there are already commercial services via train, greyhound, private shuttles, etc… that all service the same places but they are actually charging market rates to stay in business. This is why people are using Bustang because it is subsidized by taxpayers.
Bustang is like the Colorado Fair subsidized insurance plan
The same is true in Colorado real estate. The new Fair plan, the state run insurance plan, does exactly the same thing as bustang where taxpayers subsidize behavior. Insurance rates in Colorado are skyrocketing because costs are being transferred from high risk properties covered under the fair plan to lower risk property owners. At the end of the day, remember economics is a zero sum game and someone will be paying in Colorado essentially via a transfer tax. Here is my past blog post on the property insurance fiasco that basically emulates what is happening with Bustang.
Colorado and local Budget issues continue to grow
The Bustang fiasco highlights the issues facing the state and are indicative of the huge disconnect between revenues and spending. Let’s look at housing. How much money should taxpayers spend on a house 300k? 400k? to house homeless? Has Denver’s 200 million on homelessness been spent wisely? How many of these people are now employed, drug free, and productive members of society. I would guess this number is in the hundreds at best.
Furthermore, crime, including violence and emergency service calls, has significantly increased at specific Denver homeless shelters, particularly those converted from hotels. A notable example is the former DoubleTree hotel on Quebec Street, where police calls surged 2,900% after its conversion, including reports of assault and two murders. Safety concerns, security failures, and understaffing have been highlighted. But yet Denver taxpayers are spending 200 million???
Solution is more spending in Colorado as opposed to accountability
The legislative answer to overspending on Bustang, homelessness, and every other issue is that the state needs more revenue. A proposal is on the November ballot to remove Tabor for education spending. Essentially this would allow the Colorado budget to continue growing and have another funding mechanism for education spending. This is a giant shell game that does not strike at the heart of the issue facing the state of Colorado and cities throughout the state which is accountability. Colorado cannot spend its way to fiscal responsibility.
Why should property owners care about Bustang or the budget issues
At the end of the day, everyone in Colorado will pay for the crazy spending through higher taxes. This will come in the form of higher property taxes, sales tax, and income taxes. All of these taxes will ultimately flow through the Colorado economy in the form of higher rents and lower spending.
Colorado driving towards a financial cliff
Somewhere in the last 10 years Colorado has lost its way. Spending on everything is out of control which has resulted in a 1.5 billion dollar budget deficit in 2026 with this number expected to rise substantially over the next few years due to huge increases in Medicare spending.
The only solution being pushed is to basically eliminate Tabor which will raise more revenue but not actually alter the trajectory of overspending. Regardless of whether tabor is rolled back, the state will continue to face deficits as the structural issues are not being addressed. Although Bustang is not the biggest concern facing the state, it highlights the dysfunctionality we are seeing and begs the question of when do taxpayers ultimately say no. Until taxpayers wake up and force the issue of uncontrolled spending, look for property taxes, sales taxes, and income taxes to increase. The irony is that the legislature still wonders why the cost of living in Colorado continues to increase :<
Additional Reading/Resources
Bustang successful for Colorado but drives toward a financial cliff
https://coloradohardmoney.com/i70-traffic-snarls-ski-real-estate-2/
https://coloradohardmoney.com/colorado-calls-taxes-junk-fees-4-huge-changes-for-landlords/
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Glen Weinberg personally writes these weekly real estate blogs based on his real estate experience as a lender and property owner. He is the owner of Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
Glen resides in Colorado, lends in Colorado, owns property in Colorado, and services loans in Colorado which provides a unique real estate prospective of what is actually happening on the ground both in Denver and throughout Colorado. My goal of this real estate blog is to provide an honest assessment of what I see happening in Colorado real estate and how it will impact real estate owners, buyers, realtors, mortgage professionals, etc…
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