The gas tax — the mechanism that has financed the repair and maintenance of state highways in Hawaii — may soon be in a death spiral.
Even before electric vehicles (EVs) began showing up in significant numbers on the roads, the gas tax had begun to lose its potency as a source of revenue.
A necessary transition to an alternative funding source has begun. In the early planning stages now at the state Department of Transportation is a tax assessed based on the mileage a driver racks up.
There is logic behind that approach, but care must be taken to keep a new plan from overburdening those who can least afford it.
Additionally, on Oahu, launching the program before commuters have rail as an alternative transit option would be problematic.
A decade ago, rising retail gas prices pushed car manufacturers toward producing more fuel-efficient models, driving down gas consumption.
And because gas taxes are assessed by the gallon, rather than as a percentage of the total price, revenue has plunged.
That decline will surely accelerate as hybrids and fully electric vehicles occupy a larger segment of the car marketplace.
So it does make sense that Hawaii and other states are beginning to look for new ways to finance highway improvements.
And it’s fair to seek to capture revenue from EV drivers who use the roads but don’t pay the fuel tax.
However, the devil is in the details of how any new scheme would work.
And those regulations, on which public input must be sought, are still a long way off.
What’s already clear is that any highway-fund system that combines a mileage-based fee with the gas tax would excessively penalize people who have a longer commute.
Ultimately, Hawaii should use any new plan as a replacement revenue stream, not a supplement.
The state’s current fuel tax generates one-third of the state Highway Fund. The tax rate of 47.1 cents per gallon has not been increased since 2012.
The DOT has received a grant of just under $4 million from the Federal Highway Administration to pilot a new road usage charge.
Hawaii is among a consortium of states in the process of performing similar three-year demonstration projects; its award was the largest issued for the current grant cycle. The state will provide $1.5 million in matching funds.
The department needs to overcome its reticence for talking about the project; this is something that affects almost everyone, and it needs to be pursued with transparency.
Instead, officials did not respond to interview requests from the Honolulu Star-Advertiser.
The grant application now is posted online (hidot.hawaii.gov/administration/library/publications), but it was released Thursday only after a records request from the Star-Advertiser.
By contrast, the application exudes confidence about the potential for the demonstration project to yield guidance of value to Hawaii and other states.
The state proposes the largest “road usage charge” demonstration ever attempted, according to the application, “allowing for widespread communications and continuous feedback from our state’s residents and continuous system modification and improvement, which will prove useful to other states.”
Despite being a small state, Hawaii can meet or exceed federal objectives for the program with a plan to provide nonbinding test billings to more than 1 million motorists statewide, according to the document.
The state would “collect, store, transmit and use vehicle data and periodic odometer readings … through the periodic motor vehicle inspection process,” according to the grant application.
The technology and scope of this data collection must be fully aired in a public setting.
The experiences of other states should be assessed, as well, before the tax is restructured. Oregon, for example, is experimenting with a program it calls OReGO, in which motorists are charged 1.5 cents per mile. That state deals with the doubling of road usage charges and gas taxes by giving motorists credits for the fuel tax they pay at the pump.
This could be considered as a transitional step, but for the long term a single tax seems less cumbersome.
It’s plain that Hawaii must devise a new way to finance its highway fund. So far lawmakers have been reluctant to boost the existing taxes, given the DOT’s inefficiencies, which indeed need to be corrected.
A user-based tax could work well, incentivizing the use of mass transit and supporting state goals of reducing Hawaii’s reliance on fossil fuels.
Let the discussion begin.