Hawaii drivers probably will have to wait for market conditions to reverse the recent spike in gas prices despite a call Wednesday by President Joe Biden for states to temporarily suspend their gas taxes.
Biden made his plea in a public address that also called on Congress to suspend the federal gas tax for 90 days.
Hawaii on Thursday had the fourth-highest average price for a gallon of regular gas among states at $5.56, which is up from $5.38 a month ago and $3.98 a year ago, according to AAA.
The gas tax holiday proposal from the Democrat in the White House hasn’t received much of a warm embrace from federal lawmakers, or in Hawaii from several fellow Democrats in state government, though Republican state House Rep. Gene Ward is promoting a Hawaii gas tax break.
“While retail prices continue to spiral out of control, Hawaii families and businesses are feeling the brunt of the pain,” Ward (R, Hawaii Kai-Kalama Valley) announced in a statement Wednesday. “We see it particularly at the gas pump, where drivers have to weigh the cost against other basic needs — such as food, medicine and housing. Until people’s paychecks can start to keep pace again, someone has to step in and help before it’s too late.”
Ward has asked Gov. David Ige to declare a 30-day emergency and suspend state taxes on gas.
Ige, a Democrat, expressed concerns with a state gas tax suspension and is not considering such a move.
“A state (gas tax) holiday would be difficult to implement and certainly the impact would be limited,” he said Wednesday.
The state gas tax is 16 cents per gallon. The federal tax is 18 cents per gallon.
Ige also said a big concern is that retail distributors, which pay the tax, wouldn’t have to pass the savings from a gas tax holiday along to consumers.
Part of the difficulty of implementing any state gas tax holiday is that it would be up to the Legislature to establish, according to Ige.
Hawaii’s Legislature is out of session until January, and a few Democratic legislators on Wednesday didn’t express any enthusiasm for calling a special session to entertain suspending the state gas tax.
The three lawmakers, House Speaker Scott Saiki (D, Downtown-Kakaako- McCully), Rep. Sylvia Luke (D, Punchbowl-Pauoa- Nuuanu) and Brian Taniguchi (D, Makiki-Tantalus- Manoa) noted that counties have higher gas taxes that get charged in addition to the state and federal taxes.
County gas taxes per gallon, according to the Tax Foundation of Hawaii, are lower in Honolulu at 16.5 cents and on Kauai at 17 cents. Maui has the highest rate at 24 cents, and on Hawaii island it is 23 cents.
Ward encouraged Hawaii’s four mayors to implement county gas tax holidays.
“Suspending those taxes would be a straightforward and effective way to help ease the pinch of inflation,” he said in his announcement.
Honolulu Mayor Rick Blangiardi said on Thursday that such a suspension wouldn’t be substantially effective.
“I know that people across the country, including here on Oahu, have felt the sting of inflation, and I’m appreciative of any meaningful effort to increase buying power and reduce some of that burden,” he said in a statement. “The gas tax holiday ideas that have been proposed might sound nice, but the math behind them makes them insubstantial when it comes to providing considerable relief for consumers across our islands.”
For a county to change its gas tax, state law requires a resolution passed by a county council.
Honolulu City Council Chair Tommy Waters said he is researching available options regarding a county gas tax suspension on Oahu, but offered no endorsement of the idea Thursday.
“Above all, we need to make sure that any policies we pursue directly support local families by addressing the rising costs of living and do not merely subsidize Big Oil companies,” he said in a statement.
The Hawaii island County Council last month considered cutting its gas tax from 23 cents to 13 cents in response to the surge in gas prices and because many people on the Big Island have to drive longer distances for work compared with residents on other islands. The proposal failed on a 4-4 vote May 4 with one member excused.
Average per-gallon regular gas prices by county on Thursday were $5.45 for Oahu, $5.71 for Hawaii island, $5.75 for Maui County and $5.86 for Kauai, according to AAA.
Biden acknowledged that suspending only a federal and/or state gas tax wouldn’t amount to much savings for consumers, describing the benefit as “just a little bit of relief.” But he also said if oil refiners increased production and gas stations reduced prices in response to recent oil price declines then these things in combination with gas tax holidays could add up to $1 or more off the per-gallon price of gas.
“It doesn’t reduce all the pain, but it would be a big help,” he said.
The president also asked states to suspend their gas taxes or find other ways to offer financial relief to consumers.
Hawaii has done some of the latter.
On Wednesday, Ige signed two bills passed by the Legislature in May that will put more money into pockets of residents.
One bill will give Hawaii tax filers and their dependents $100 or $300 each depending on household income. Delivery of these rebates should begin in August.
The other bill will raise Hawaii’s minimum wage initially to $12 an hour on Oct. 1 from an existing $10.10 and make the state’s earned income tax credit refundable and permanent starting next year.
GAS TAX HOLIDAYS IN OTHER STATES
A few states suspended their state gas taxes earlier this year. Here’s some of what was done and when, along with a state’s average regular gas price per gallon reported Thursday by AAA:
Georgia
>> Enacted a law on March 18 suspending its excise tax on gas, which was 29 cents a gallon, through May 31. On May 26, the suspension was extended through July 14 via an executive order of the governor.
Gas cost — $4.44
Connecticut
>> Enacted a law on March 24 suspending its excise tax on gas, which was 25 cents a gallon, from April 1 to June 30. The law also made riding public buses free during the same period and created a sales tax holiday on purchases under $100 for clothing and footwear from April 10-16.
Gas cost — $4.90
Maryland
>> Enacted a law on March 18 suspending its gas tax for 30 days. The state’s gas tax of 36.1 cents per gallon is scheduled to rise to 42.7 cents on July 1.
Gas cost — $4.91
New York
>> Passed a state budget on April 9 that included suspending two state taxes on gas amounting to 16 cents per gallon from June 1 to Dec. 31. Many counties also agreed to temporarily reduce their gas taxes by varying amounts.
Gas cost — $4.99
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Taxes on Hawaii gas (per gallon)
>> Federal: 18 cents
>> State: 16 cents
>> County: 16.5 cents to 24 cents
Other taxes, including general excise tax and barrel tax on oil, not included.