The Senate Ways and Means Committee on Monday approved a hike in the gasoline tax, to 19 cents from 16 cents per gallon, as well as increases in the state’s vehicle registration fees and weight taxes. Proposed by Gov. David Ige’s administration, the measure is expected to increase costs for a typical motorist by about $83 a year.
Senate Bill 2938 still needs to pass votes in the Senate and the House before it can move to the Governor’s Office for consideration.
The hikes are expected to generate an extra $75.3 million annually for the Hawaii Department of Transportation, money that the department says is needed to help fix the state’s ailing highway system.
“The amount of cars and people continue to rise, but our ability to add more lanes for drivers is severely limited due to land restrictions and funding,” Transportation Department officials wrote in testimony on the bill. “We simply cannot build ourselves out of congestion. Therefore, HDOT is focusing its resources toward making the system that we have work better.”
Politicians generally shy away from tax increases during an election year. Ige wouldn’t run again until 2018, but most state legislators will face re-election this year.
Some lawmakers seemed pained as they voted to pass the measure out of their committee.
“It is difficult to raise any fees, let alone three,” said Sen. Jill Tokuda (D, Kailua-Kaneohe), Ways and Means chairwoman. “But also we want to make sure that we can take care of our infrastructure.”
Sens. Donovan Dela Cruz (D, Wahiawa-Whitmore-Mililani Mauka), Suzanne Chun Oakland (Downtown-Nuuanu-Liliha), Gil Riviere (D, Heeia-Laie-Waialua) and Glenn Wakai (D, Kalihi-Salt Lake-Aliamanu) all voted yes but with reservations.
Sen. Sam Slom (Diamond Head-Kahala-Hawaii Kai), the Senate’s only Republican, cast the sole dissenting vote. He called the bill a “triple whammy.”
“Most people now are paying, just for the registration of a car, between $350 and $400 a year, which is outrageous,” he said.
Slom said his support for the gasoline tax has waned with Hawaii gaining the “dubious distinction of having the worst roads in the country.”
A 2014 report by the Reason Foundation, a libertarian think tank in Los Angeles, ranked Hawaii the worst state in the country when it comes to overall highway performance and the system’s cost-effectiveness.
The report noted that high administrative costs could be siphoning off money for road repairs. Hawaii had the highest administrative costs of any state, according to the report, spending $90,000 for every mile of state road. By comparison, Texas spent less than $4,000 per mile and Kentucky spent less than $1,000 per mile, some of the lowest rates in the country.
The tax hikes have also been controversial because the state Transportation Department has come under fire from federal regulators for not spending federal dollars.
The department is allocated about $160 million each year in federal funds and as of January had a backlog of more than $600 million in unspent federal funding for highway projects in Hawaii.
Federal Highway Administration officials have warned the state that it could lose federal funds if it doesn’t spend the money faster. State officials say they have significantly reduced the backlog from a high of about $940 million in 2010.
SB 2938 would increase the state vehicle registration fee to $76.50 from $45 and raise the motor vehicle weight tax to 2.75 cents from 1.75 cents per pound for passenger vehicles.
For larger vehicles, weighing more than 4,000 pounds, the weight tax would increase to 3 cents from 2 cents per pound. Vehicles weighing between 7,000 and 10,000 pounds would be taxed 3.25 cents per pound, up from 2.25 cents per pound. The flat rate for vehicles weighing more than 10,000 pounds would increase to $400 from $300.
