Tax cut would help gas-guzzlers, council told

LIHU’E — A Kaua’i County Council bill to give Kaua’i drivers including visitors $1.2 million in fuel-tax breaks will give unnecessary breaks to owners of large, gas-guzzling vehicles, and encourage them to drive more, leading to more island pollution, a resident told members of the council during a public hearing on the proposed bill last week.

“I believe that providing the relief by cutting the (county’s gas) tax rate is simple. But it is about the worst way it can be done,” Carl Imparato told council members during their meeting in the council chambers of the historic County Building.

He said passage of the bill “sends all the wrong signals,” and would reward owners of large vehicles, but give fewer benefits to owners of small, gas-saving vehicles.

One option the council members may pursue in place of the bill before them would be to give the same size rebates to owners of “non-fleet vehicles” on the island, Imparato said.

Council Vice Chairman James Tokioka liked what he heard, and indicated Imparato’s suggestions could lead to options he and his colleagues could pursue.

The council members are proposing to reduce the county portion of the fuel taxes from 13 cents per gallon to six cents per gallon, from Jan. 1, 2006 to June 30, 2006.

The tax break would only be temporary, and the county’s tax per gallon will go back up to 13 cents from July 1, 2006.

In addition to the county tax, federal and state taxes also are assessed for each gallon of gas sold at the pumps.

Combined federal, state and county taxes are now 61 cents a gallon.

The council members also conducted another public hearing last week, on a resolution, as required by state law, to reset the county’s gas-tax rate.

Approval of the county tax reduction on a gallon of gas would result in the loss of $1.2 million from the county’s Highway Fund, which is used to fund resurfacing and road-building projects.

To make up for the loss, council members also looked at two bills that would essentially recognize the lost income, and transfer $1.2 million in unappropriated surplus funds to the county Highway Fund.

Those funds are limited. The current un-audited estimates of the county’s General Fund reflect a surplus balance of about $3.7 million.

The Kaua’i County Department of Public Works leaders have jurisdiction-over the county’s Highway Fund, and need the money for their road-resurfacing program, and for operational needs of the department, County Engineer Donald Fujimoto has said.

Without the funds or the transfer of the unappropriated surplus, DPW officials may not have the necessary funds to follow through on their road-repaving schedule.

That could mean more bad roads, and possible accidents that could lead to unnecessary and costly lawsuits and claims, county officials have acknowledged.

The council members have proposed the gas-tax break to help residents deal with fluctuating gas prices in recent weeks.

The council members also want to give the tax break because they were expecting $2 million in state finds for the county’s Highway Fund.

Councilman Daryl Kaneshiro, who heads the council’s Finance and Intergovernmental Relations Committee, said members of the state Legislature appropriated funds to each island for road maintenance and repairs.

“When we proposed the tax break, because of the fluctuations in gas prices in past weeks, we thought it would be a good time to give residents a break,” Kaneshiro said.

Kaua’i County’s share of the state funds was about $2 million.

The problem, he says, is that the funds have not been released by Gov. Linda Lingle.

Laurie Yoshida, the governor’s liaison on Kaua’i, said members of the state Legislature approved legislation that would fund county road projects from the state Highway Fund.

She said it is her belief that a state law stipulates that money coming from that pocket of funds can only be used for state road-improvement projects, not county ones.

“She (Lingle) has not released the funds because of the legality of releasing state funds for county projects, and this matter is now under review by the state Attorney General’s office,” Yoshida said.

State Sen. Gary Hooser, D-Kaua’i-Ni’ihau, told The Garden Island that he is disappointed the Republican governor has not released the $2 million.

“It is my understanding there are some legal questions,” Hooser said. “The Legislature has the opinion that it is permissible to release the funds to the counties,” Hooser said. “But the governor’s legal advisor is not so sure.”

Councilman Jay Furfaro, who heads the council’s Economic Development Committee, said the latest word is that the money won’t be coming at this time.

“The initial question is, ‘Do we have the $1.2 million to fall back on?'” Furfaro asked. “The chances are we don’t, because the state has made it known that there will be no relief at this point.”

Imparato said that if the gas tax break goes through in its current form, the council will, in a sense, encourage more gas consumption by rental car drivers.

If the county’s Motor Vehicle Registration division can get data on non-fleet vehicles on the island as a way to give back rebates, then people from that division can sort through the records and send up to two rebates for two vehicles per household address, Imparato said.

Imparato said if the council members were to go through their gas-tax break proposal, another better way to distribute the $1.2 million in tax savings would be to “apply the tax rebate as a credit against next year’s vehicle registration.”

That practice has been carried out in other states, he said.

Imparato said the funds could also be applied to building affordable-housing units and any other projects deemed by the council that could benefit Kauaians.

Councilwoman JoAnnparato, said she felt retrofitting county facilities with energy-saving equipment will save the county tons of money in the future, particularly as deposits of fossil oil diminish and oil prices go up.

“I would urge the council to consider the fairest and most environmentally-safe ways of distributing the $1.2 million before acting by simply cutting the fuel-tax rate,” Imparato said.

Tokioka said Imparato has many good ideas, and wished more people would come forward with balanced and well-thought-out testimony on issues, because “You (Imparato) pointed out the good things, and you pointed out the bad things.”

Kaua’i residents Andy Parks and Ed Coll said Imparato has good suggestions, and that members of the council should not pass a bill into law that would reward people who drive big cars and drive more.

Coll said he went through the nation’s first large-scale energy crisis in the 1970s, and in Alaska, lawmakers there at the time wanted to ration gas based on the size of a vehicle.

Owners of larger vehicles that needed more gas to operate got more gas, and owners of smaller cars got less gas, through a rationing program in that state, Coll said.

He said he drove a Volkswagen vehicle at the time, and today on Kaua’i, he drives a slow-moving, but energy-saving, electrically-powered vehicle.

Because he doesn’t buy gas for that vehicle, the bill, if passed into law, wouldn’t help him, Coll said.

“What affects me is the (needed and continual) resurfacing of the road, because I go pretty slow, and I look at roads carefully,” he said.

The gas-tax break will benefit motorists, but not him and those who get around the island by bicycle, for instance. The only benefit he and such residents may derive from the bill is “we get to smell more people driving around and blowing gas into our noses.”

Wailua Homesteads resident Glenn Mickens said information provided to him by Kaneshiro showed residents used 31,332,641 gallons of fuel and paid $15,016,791 in federal, state and county taxes.

Mickens said Kauaians paid about $5 million in state gas taxes, and $4 million in county gas taxes, and that he agrees with Kaneshiro that all of those funds should remain on Kaua’i for road improvements here.

For himself, he said he also would like the federal portion to remain on Kaua’i as well, to improve island roads.

“Some make the case that we are entitled to the $4 million of local tax (revenues), but I think that a strong case could be made to keep all the gas tax money on Kaua’i,” Mickens said.

In other testimony, Kaua’i resident Barbara Elmore applauded Yukimura for encouraging more people to ride the county’s bus system, as a way to alleviate traffic congestion and to have folks become less reliant on their cars for getting around the island.

She said she wished the rest of the council members would take a similar stand.

Taking the bus has its upside, she said.

“Its fun, because you get a flavor of the island on the bus you don’t get anyplace else,” Elmore said. “And you can leave your car at home and save some of that gas expense and tax expense.”

The proposed gas-tax break bill will now back for discussion at the council-committee level. If the legislation has merit in its current form, it could go to the full council for action soon.


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