A plan to replace the city’s existing fuel tax with a highway user fee got an initial approval from the City Council Budget Committee on Wednesday but could be facing a bumpy road ahead.
Several Council members expressed concerns about the bill, as did officials from Mayor Kirk Caldwell’s administration.
Councilman Ikaika Anderson introduced the bill after the Council shot down Caldwell’s plan to increase the fuel tax to 21.5 cents from the current 16.5 cents.
Anderson contends that with the growing popularity of electric vehicles and hybrids, a fuel tax is neither sustainable nor fair to all motorists.
He said information he has gathered showed fuel tax revenues actually on the decline over the past seven years.
If applied evenly across-the-board to all vehicles that need to be licensed as motor vehicles, all vehicle owners would pay about $71 annually to make up for the same amount of revenue now being generated by the city’s pay-at-the-pump fuel tax.
Anderson said he’s more inclined to embrace a tiered system that would at least separate commercial vehicles from private consumer vehicles.
Council members Breene Harimoto and Stanley Chang, however, said they worry that replacing a fuel tax with a highway user fee could unfairly burden those who do not use their vehicles as much as others do.
Harimoto said many senior citizens, such as his father, travel only 100 miles a month and do not pay much in fuel taxes. He said, however, that he appreciates the discussion on finding alternatives to the fuel tax and he said Congress is also looking at declining fuel tax revenue.
Chang said the vehicle registration fee already imposes "base charges" on vehicle owners who rarely drive or may be keeping their vehicles for emergencies.
"The gas tax, while clearly not an ideal situation, does tend to place the burden on people who do consume a lot of gas and increase our dependence on fossil fuels," he said.
Acting city Budget Director Nelson Koyanagi said that while the administration supports any revenue-generating proposal, attorneys from the Department of Corporation Counsel have concerns about whether it can pass legal muster. He recommended that Anderson get an opinion from the Council’s lawyers.
Koyanagi’s comments echoed the sentiments of Managing Director Ember Shinn, who, in a letter to Council Budget Chairwoman Ann Kobayashi, also urged a go-slow approach to the concept of replacing the fuel tax with a highway user fee.
Gareth Sakakida of the Hawaii Transportation Association testified against the bill, saying that businesses that depend on trucks and cars are still smarting from an increase in state fuel and weight taxes made several years ago.
"Timeout, already," he said.
