With opposition mounting against his proposal to increase the city’s fuel tax by 5 cents a gallon, Mayor Kirk Caldwell is urging City Council members to keep an open mind to the idea.
The plan, the most controversial part of his $2 billion operating budget for the 2014 fiscal year, would increase the city’s fuel tax on motorists to 21.5 cents a gallon from 16.5 cents a gallon. It would generate $15 million that Caldwell said he will direct toward a beefed-up street repaving project and restoring bus routes.
The administration released calculations to the Star-Advertiser on Thursday night showing the fuel tax hike would cost the average motorist $21.45 more annually, a figure it calculated using 2011 state Data Book figures that determined the average Oahu driver traveled 8,726 miles and used 429 gallons of fuel that year.
On Thursday afternoon, six of nine Council members expressed their reluctance to vote for a fuel tax hike.
Budget Chairwoman Ann Kobayashi noted that the tax would have an adverse impact not just on the typical family driver, but also on companies that rely on trucks, vans and buses to transport goods and people.
"The delivery trucks are going to be taxed, also, and then they’re going to pass on their increased cost to the store and the store is going to pass on their increase to the consumer," Kobayashi said during a Budget Committee meeting. "The same with all the utility trucks and repair trucks."
Councilman Ikaika Anderson said the gasoline tax is not a sustainable source of revenue in the long run. The amount of revenues generated from the tax has not increased over the last five years even as the number of registered vehicles on the island has increased significantly.
The anomaly has been attributed largely to an increase in electric vehicles that don’t need fuel or, in the case of hybrid vehicles, need to visit gasoline stations less often.
"The owners of electric vehicles don’t pay the gasoline tax, and yet they utilize our roads," Anderson said. "That leaves the folks who drive fossil fuel-powered automobiles to face the burden of paying for our roads.
"As people switch to electric vehicles and as people switch to public transportation with gasoline taxes increasing, I think that we’re unfairly shifting the burden," he said.
Councilwoman Carol Fukunaga said the Caldwell administration should look at a way of ensuring owners of electric vehicles pay their fair share for road improvements. "They are all residents who are using the roads," she said.
Council Chairman Ernie Martin and Councilman Ron Menor said motorists in their districts would be disproportionately affected.
"I represent a district where a large number of commuters drive long distances each and every day," Menor said.
Councilman Joey Manahan said that while he still wants to hear from more constituents, he’s also reluctant to approve a fuel tax hike. He noted that the impending shutdown of the Tesoro oil refinery is already leading to uncertainty about where Hawaii’s petroleum will come from and what gasoline will cost.
Kobayashi and Martin first voiced their opposition to the fuel tax increase March 1 only hours after Caldwell’s budget plan was released.
Caldwell, in a statement late Thursday, said he wants Council members to hold off on a final opinion to let the public comment on the issue, and "until they come up with additional revenue sources or cuts to services they feel are acceptable."
The mayor said $21.45 more a year represents "a good investment" when "the poor condition of our roads cost the average Oahu driver $701 a year in additional auto repairs," according to a national transportation research group.
Gareth Sakakida, managing director of the Hawaii Transportation Association, told the Star-Advertiser he shares Kobayashi’s concerns about the gas tax, calling it "a lousy idea."
Sakakida warned, "Everything we have in our home, and our home itself, is transported by trucks. Any cost increase to us will eventually have to be passed on to the consumer."
He noted that since the fuel tax was last increased in 1989, the city’s vehicle weight tax has increased 3.75 cents per pound. "These days, each penny increase in weight tax generates $24 million for the city, and they increased it a penny in 2010 and 2011," Sakakida said.
A 1-cent-per-gallon increase proposed by former Mayor Peter Carlisle two years ago was shot down by the Council.
The Council has until June to pass the budget. The public will get its first opportunity to testify on the fuel tax and the rest of the mayor’s budget package at the Council’s meeting at 10 a.m. Wednesday.
