As Honolulu’s gas prices edge closer to $4 a gallon, the City Council takes up a measure today that would increase the city’s gas tax by 1 cent, to 17.5 cents per gallon.

The proposal is among several revenue-generating measures proposed by Mayor Peter Carlisle as part of his administration’s budget for the 2012 fiscal year, which begins July 1.

Carlisle’s operating budget is $114 million more than last year’s city spending plan and proposes various increases in user fees and taxes.

Although an increase in the gas tax would hit residents of his district harder than many others, Council Budget Chairman Ernie Martin (Mililani Mauka-Temple Valley) said the Council needs to keep all proposals alive in light of recent events, namely the Council on Revenues’ revised forecast — pushing the state budget deficit close to $1 billion — and the potential decline in tourism from Japan.

"That might position the Legislature to be more aggressive toward taking some revenues away from the county," Martin said. "If that occurs, all of the measures that the administration and Council have put forth thus far have to be left on the table for discussion."

Gov. Neil Abercrombie has pledged to not touch the counties’ hotel room tax money, but measures advancing in the Legislature indicate a willingness on the part of state lawmakers to at least consider dipping into county coffers to balance the budget.

The Senate has advanced bills to cap the amount of hotel room tax money going to counties at current levels and to divert money collected for the Honolulu rail transit project to the state, with the intent to pay it back through bonds.

City Council members began a series of budget briefings this week to hear from departments on their spending plans.

An increase in the fuel tax was proposed last year by Council Chairman Nestor Garcia but never advanced due to lack of support. Carlisle has proposed a 6-cent hike phased in over three years.

Hawaii already ranks third highest among states in the amount of taxes collected on gasoline, at 64.2 cents per gallon as of this year, according to the American Petroleum Institute. California is highest at 66.1 cents, and New York second at 65.6 cents. The national average is 48.1 cents.

This week the state earned the dubious distinction of being the first since 2008 to reach $4 a gallon, as the statewide average for regular gas hit the mark Monday and climbed yesterday to $4.02 a gallon. Honolulu’s average for regular, self-serve unleaded was $3.92 a gallon, according to AAA’s Daily Fuel Gauge Report.

Foes of a fuel tax hike argue that it disproportionately affects poorer residents who live in outlying areas. Martin said he shares those concerns but that the city needs to keep all options alive.

"The fuel tax, of course I have reservations, but we still have to take a look at it," he said.

The Council has until its June meeting to complete work on the budget and send it to Carlisle for approval.