Honolulu gas prices — already at record highs — could inch up a penny more as the City Council kept alive yesterday a measure to increase the county’s fuel tax.
Council members emphasized the need to keep all proposed funding measures on the table as they met late into the night to hear a variety of budget proposals, including the fuel tax hike, deep cuts to certain city departments, user fee increases and the city’s main source of revenue: real property taxes.
All of the measures passed yesterday on the second of three required votes by the Council. They go back to their respective committee for further vetting.
The Council has until mid-June to complete work on the budget for the 2012 fiscal year that begins July 1. Mayor Peter Carlisle has proposed a $1.932 billion operating budget for fiscal 2012, up $114 million from the current fiscal year.
Budget Chairman Ernie Martin has voiced concerns about the fuel tax from the beginning because of its impact on rural residents, but said he also was leery of the state Legislature potentially scooping up a portion of the county’s traditional share of funds.
State lawmakers are considering a proposal to cap the amount of hotel-room tax money going to counties, but could dip deeper into those funds — about $40 million for Oahu — as they work to balance the state budget by the end of next week.
"Until they recess, I think we need to leave all options on the table," Martin said.
The fuel tax proposal passed 7-2, with Councilmen Ikaika Anderson and Tom Berg voting in opposition.
Both questioned the rationale behind the fuel tax increase, which is estimated to generate about $3 million for the city Highway Fund, as the Carlisle administration has proposed a 40 percent reduction in the amount of money set aside for road repairs in its capital improvement budget.
"Yet they’re saying that their reason for introducing this measure is so we can continue rehabilitating our roads," Anderson said. "That logic doesn’t wash."
Carlisle has said the reduction in capital improvement spending is part of his administration’s effort to reduce the city’s long-term debt.
Councilman Romy Cachola voted for the fuel tax with reservations, saying he would prefer colleagues look elsewhere for road repair money.
"A lot of people are suffering," Cachola said. "Having them come up with a penny more for the fuel tax — we will be adding an additional burden on their part."
The increase would put Honolulu’s fuel tax at 17.5 cents a gallon, compared with 16 cents in Maui County, 13 cents on Kauai and 8.8 cents on the Big Island. The state fuel tax is 17 cents.
Meanwhile, Council members met into the night to hear from constituents on proposed increases in other areas, including public golf course greens fees, zoo admission, public employee parking, sewer fees and other user-fee items to help the city cover the cost of providing those services.
Council members heard more than two hours of testimony from residents who turned out to support the city Office of Economic Development and the Mayor’s Office on Culture and the Arts.