5-cent gas tax hike adds to heavy burden

Mayor Kirk Caldwell proposed a week ago to issue bonds at a low rate to repair Honolulu’s badly needed streets, which would be a significant change. But just three days later, he called for a nickel-per-gallon increase in the city’s 16.5 cents-per-gallon gasoline tax, aimed at paying the bonds’ debt service and to restore cut bus service.

Oahu residents already enduring rising prices at the pump, high energy costs, increased water bills and rising sewer fees are reeling from sticker shock on too many fronts. Key City Council members are right in their instinctive rejection of the fuel-tax increase while islanders struggle to recover from the recession.

Oahu’s streets undoubtedly need fixing. The mayor’s proposal to spend $150 million from issuing bonds for the first of five years aimed at repaving about 1,520 lane-miles of city streets is ambitious. That would be "an enormous increase in the amount of work done," Caldwell said.

Last Friday, he proposed the 5-cent-per-gallon fuel tax increase as part of the city’s $2.09 billion operating budget. That would be the largest operating budget in history — 6.5 percent higher than the budget that the Council approved last summer for the current 2013 fiscal year.

The fuel tax hike would raise $15 million a year — about $11 million for the road-repair bonds’ debt service and $3.5 million to restore bus service that was reduced last year.

But there’s real concern about the city’s ability to handle the huge acceleration in road repairs: It was hard-pressed to do the current $77 million worth of work, so now, with an anticipated doubling of job contracts, more staffers are being hired into the city bureaucracy. Further, there’s scant assurance that the millions reaped from the proposed fuel tax increase would go strictly toward road repairs.

The nickel per gallon would be added the city’s current tax of 16.5 cents, which is part of the 68 cents a gallon in federal, state and county gasoline taxes, third-highest in the country behind only New York and California. It would be Honolulu’s first fuel tax increase since 1989 and would make Honolulu’s all-around tax the highest in the nation.

Two years ago, the Council rejected then-Mayor Peter Carlisle’s proposal to increase the fuel tax by a penny per gallon, and should take little time in turning down Caldwell’s bigger tax hike.

Council Chairman Ernie Martin and Budget Chairwoman Ann Kobayashi appear ready to lead the opposition, with Martin calling it "dead on arrival."

"It’s not the most sexy thing to work on," said Caldwell about his streets-and-sewers priorities, "but it’s the very reason I ran for the job and I’m committed to moving infrastructure projects forward."

Caldwell was right in turning to low bond rates as a way to afford needed projects, and street repairs certainly qualify. But the envisioned pace seems overly ambitious without a clear vetting of more cost-effective ways to live closer within our means.

Let’s hope Kobayashi is right in her belief that Caldwell likely has fallback sources of funding without having to raise taxes.

The mayor is correct in saying that the presence of potholes and uneven paving of streets "affects the quality of life in our city." Unfortunately, paying the highest rate for gasoline would only distress residents, many already struggling with the high price of living in paradise.