Despite a full-court press lobbying effort by Gov. David Ige’s administration, the proposed gas tax, weight tax and vehicle registration fee increases it proposed may be dead for the year.
The tax and fee increases would have raised an extra $70 million per year for the state Department of Transportation, but lawmakers maintain the department has been unable to efficiently spend the money it already has.
House Transportation Chairman Henry Aquino on Wednesday deferred Senate Bill 2938 indefinitely without allowing a vote on it.
“Before we do anything to increase fees or taxes, we want to make sure that everything is in working order,” he said. “We do understand the need for future funding for roads and bridges … but we just want to make sure everything is set and good before we move forward with any increases.”
Aquino (D, Waipahu) acknowledged the dozen members of his Transportation Committee showed strong resistance to raising the taxes and fees. The entire House of Representatives is up for re-election this year, and it would have been “very difficult” to persuade a majority of the committee to agree to the increases, he said.
Ige’s chief of staff, Mike McCartney, said the administration will try to salvage the bill before the session ends for the year.
“We’re going to continue to work with the House and address some of the concerns that were there, but we’re going to need the money as we go forward down the road,” McCartney said.
Transportation officials said they need the extra tax and fee revenues to increase capacity on Hawaii’s roads and to reduce traffic congestion.
Without the extra funding from the tax and fee increases, several large projects, including the planned widening of eastbound H-1 lanes between Waiawa and Halawa will be delayed, said Edwin Sniffen, deputy director of DOT’s Highways Division. That project would essentially duplicate the widening already done on the H-1 westbound lanes.
“We were planning to push it into planning and design to put out a project in about 2019 for $120 million. We don’t have the $120 million now, so we’re going to have to pull back on that,” Sniffen said. “We’re going to have to delay it until we can build up enough funding to afford it.”
Another project that will likely be delayed is the Kahekili Highway widening project in Windward Oahu, Sniffen said. That project would expand the two-lane highway to four lanes from Haiku to Ahuimanu, and the state has already begun the environmental studies for it.
McCartney said, “The fact is that those projects need to get done, and we’re going to need funding for it, so the sooner we can get to it, the faster we can get them done.”
Ige asked lawmakers earlier this year to raise the state’s gasoline tax to 19 cents per gallon from 16 cents per gallon while also boosting the state’s vehicle registration fees and weight taxes, steps the administration estimated would cost a typical motorist about $83 extra per year.
The revenue from those taxes goes to the state Highway Fund, which finances road maintenance projects and new construction. The gas tax increase would have been the first since 2007.
The Ige proposals would have also doubled the tax on diesel oil to 2 cents from 1 cent per gallon, and increased the tax on aviation fuel to 2 cents from 1 cent per gallon.
The state DOT has been criticized by the federal government for being slow to spend federal funds it receives for highway projects, and lawmakers questioned whether it makes sense to raise taxes to provide more money to DOT until that issue is resolved.
The department has been allocated about $160 million each year in federal funds, and currently has nearly $600 million accumulated in unspent federal funding for highway projects in Hawaii.
Federal Highway Administration officials have warned the state it could lose federal funding if it doesn’t quickly spend that federal money, but state transportation officials say they have significantly reduced the backlog from a peak of about $940 million in 2010.
Aquino cited the federal funding issue Wednesday when he announced he would not allow the gas tax increase to advance.
“We understand the concern that the department has mentioned, but (with) the areas of concern regarding the backlog as well as DOT’s management up until this point, we feel that needs some tweaking before we consider any increases at this time, so we’re going to defer,” Aquino said.
The gas tax increase proposal has been strongly opposed by some members of the public, including Nanakuli resident DeMont Connor, who testified on Wednesday.
Connor told lawmakers that many West Oahu residents already struggle to make ends meet, “and we’re pretty much fed up with more taxes and more taxes and more taxes.”
