Having read the recent article on the proposal to change from a state tax on gas and diesel fuel, to a pay-per-mile charge, I decided to look into the actual numbers being used to justify the change, and to see who the winners and losers would be.
The reading may be boring, but the results may surprise you. If you are not into lots of boring numbers, jump to number 5.
1. From 2017 to 2018 there was actually a small increase in state taxes collected on gasoline and diesel fuel for highway use. But, that is not the only source of fuel taxes. Aviation fuel taxes went up, and the largest decrease was in taxes on gasoline and diesel for boats, and diesel fuel used for off-road use (construction equipment, farm equipment, etc.)
Overall, the state collected $194,761,230 in total fuel taxes in 2017 and $201,772,728 in 2018, an increase of $7,011,498.
However, from 2016 to 2017 there was a drop in revenue, but it rebounded in 2018 by 3.6 million over 2016 levels.
So, the justification for changing the system being “the loss of fuel-tax revenue due to higher fuel efficiencies and the growing use of electric vehicles” really does not hold much water.
State Rep. Sylvia Luke recently stated in an article in Hawaii News Now that the tax revenues have been dwindling by $30 million, but the state’s own numbers tell a different story.
State tax revenues from gas and diesel for 2017 were $ 82,004,997, and in 2018 $ 82,336,357, an increase of $331,360. This is far from the stated $30 million being lost.
2. They have stated that the proposal will be “revenue-neutral.” If they are trying to raise more money, why would they even say that? To make it seem like it is not going to cost you anything. But, let’s assume that it is in fact revenue-neutral.
So how are they going to figure out how many miles you actually drive? Three other states have tested this on a limited basis. One way is to install a chip that tracks you via GPS. The cost of such a system would be extreme, and there are certainly privacy issues. The second way is via the mileage recorded year to year on your inspection certificate. As it turns out, the state already tracks that.
3. According to the state in 2017 (the latest data I could get), statewide, the average driver used 478 gallons of gas and diesel and drove 9,415 miles. Overall, we drove 1,135,060,000 miles (yes, that is 1.1 billion miles).
On Kauai we drove a total of 886,000,000 miles (yup, 886 million), used on average 568 gallon of gas and diesel, and averaged 10,322 miles each.
4. So, how do they figure out what to charge per mile? The most logical would be to take the tax revenues on gas and diesel ($82,004,997) and divide by total miles driven, to come up with 7.2 cents per mile. If they did that, the numbers would be staggering! As of today, the proposals have been vague, with no real data or numbers that I can find. So, I may be way off base with the per-mile charge they are proposing.
But even at 2 cents a mile, it will take extra money out or your pocket. California is proposing a 5-cents-per-mile charge.
5. So, how will this effect you, assuming the 7.2 cents a mile? Using the state averages for Kauai, if you drove 10,322 miles and drove a pickup that gets 16 miles per gallon, you used 645 gallons of gas and paid $103.22 in taxes. If you paid by the mile, it will cost you $743.18, or $ 639.96 more a year.
If you drive, say, a Ford Escape (I do) that gets 25 miles to a gallon, you bought 413 gallons of gas and paid $66.06 in gas taxes. So, it will cost me $677.12 more. If you drive an electric vehicle, it will cost you $743.18 more a year, since you pay no gas taxes now.
Now, even at 2 cents a mile, that 10,322 miles would cost $206.44, much more than you are paying in gas taxes now.
The real issue is that when you pay the gas tax, it is in small amounts, say 3 or 4 dollars a fill up. This levy will most likely be added to your yearly registration fee, so your $350 registration could now be a $1,000 registration. Plus, you would still be paying the county tax of 17 cents a gallon when you fill up.
And of course, when they need more money, they simply raise the money-per-mile charge.
For years they have pushed us to buy more-fuel-efficient vehicles or even hybrids or EVs. Any savings by doing so just went down the drain if this proposal passes.
The state is holding a series of informational meetings on this proposal. I highly recommend you attend and press them hard on the actual amount per mile and how often and by how much they will be raising the charge (which they surely will).
And in the end, start saving a few bucks every time you get gas, since the politicians don’t care what you think anyways!
But, when no one can afford to drive, it sure fixes our traffic problems.
Barry Dittler is a Wailua resident.