Initial reaction to measures introduced in both the state House and Senate last week to increase gas taxes and other vehicle fees to generate additional money for the State Highway Fund has been negative.
Our reaction is the same. While we understand the state needs more highway funds, perhaps it could take another, closer, detailed look at where funds are going now. Are they being utilized in the best manner? Could they be spent more effectively? Are the expenditures working?
Before raising taxes, we would like to see a detailed report stating how much money the state is spending on highways, where that money is spent, and if it achieved its goal. Did the projects come in under, over, or at budget? There are many options to consider before pursuing these proposed tax increases.
First, let’s cover the basics of these bills:
House Bill 1054 and its companion, Senate Bill 1280, passed first reading in both chambers last Thursday.
If approved, the legislation would increase the state gas tax from 16 cents to 21 cents per gallon on the Neighbor Islands, and to 22 cents on Oahu.
The legislation, which was proposed by Gov. David Ige’s administration, also would increase annual vehicle registration fees by $5 — from $45 to $50 — and increase tax rates for each gallon of diesel oil, as well as gasoline or other aviation fuel used for airplanes, by 1 cent.
The state vehicle weight tax also would increase. That tax depends on the weight of the vehicle.
If there was an exhaustive report, an audit, stating there was absolutely no other way to maintain, repair and develop state highways than increasing taxes, it would be more understandable.
Now, according to information included with the bill, highway systems have not kept pace with the growing economy, land use and increased demands for travel.
“Programmatic and project needs far exceed the available resources,” a justification sheet attached to the bill reads.
“The land transportation system will continue to deteriorate as demand for travel continues to increase and costs to manage, construct and administer the system increases.”
These could very well be accurate statements, but hard numbers, exhaustive studies, should back them up.
According to information provided by the state Department of Transportation, an increase of 5 cents per gallon of gas would raise an extra $27.2 million in revenue.
The proposed change to the vehicle weight tax is expected to generate an additional $10.12 million in revenue, while higher registration fees will generate nearly $5.6 million, for a total of $42.9 million in additional funds, the DOT said.
Of those funds, figures provided by the DOT estimate that Hawaii Island would receive $1.25 million for safety improvements, $2.38 million for operations, and $5.5 million for improvements in both fiscal year 2020 and 2021 — a total of $9.13 million each year.
That all sounds good, but it is hard to support proposals to raise gas taxes, vehicle fees, registration and weight taxes, because it so often seems government agencies first look to spend more and increase budgets, usually done at the expense of taxpayers through higher taxes.
Taxpayers are not against paying higher taxes if it is clearly outlined why, exactly, those higher taxes are necessary, and there really is no other option.
We advocate for holding the line on spending and, again, taking a detailed look at where highway money is going, what it has accomplished and if the funds are being spent well and those doing the work are being held accountable for coming in within budget.
Some of the online comments gave an early indication of what at least some folks thought of the proposals to raise the gas tax. We share some of them here:
• The only things our legislative branch seem to be capable of are oppressive regulation and increased taxation. Lucky we live Hawaii.
• Once again the residents of Hawaii are expected to bear the burden of road deterioration caused by increased tourist traffic.
• YES! we should encourage our local and state officials to make Hawaii too expensive to visit.
• Taxing hard-working families via a gas tax only penalizes and does not provide a solution to a problem that will continue to expand without controls.
• But first, before any increase is approved or implemented, a thorough and independent audit of all state gas tax funds for the last 20 years must be completed.
• Take, tax and spend…..take, tax and spend…
• Wonder how many times the gas tax has gone up and we are still sitting in the Kapaa crawl?
• Perfect…first the county hikes the hugely regressive GET; now the state plans to up the tax on gasoline which is also regressive. All this for road and highway work that I wager will never happen.
Higher taxes on gas and vehicles impact the working class, those who already struggle to get by. People who drive older trucks, popular in Hawaii, will pay more, particularly because they get fewer miles per gallon and they’re heavier. Any blue-collar worker who drives many miles to their job will be putting more money out of pocket to cover these tax hikes.
Such taxes hit businesses hard when they deliver products and services. Inevitably, these higher taxes on gas and vehicles make their way into the cost of everything bought and sold on Kauai.
It’s also kind of ironic that information included with the bill points out that as fuel economy of vehicles improves and the use of electric, hybrid and alternative-fuel vehicles increase, “it is clear that the current gas fuel tax is not sustainable for future highway funding.”
So, in other words, because more people are taking efforts to be efficient with fuel, driving smaller cars, and in reality protecting the environment by using less fuel, everyone will have to pay higher taxes and fees related to vehicles to make up the difference.
Yes, we realize that the cost of gas is a bargain in the U.S. compared to almost anywhere else in this world, and so we shouldn’t begrudge a few more dollars to care for our highways via higher taxes. But, we also believe there may be other ways to finance future highway projects, and we believe the state should invest the time and resources to seek them.