Mayor Kirk Caldwell’s plan to increase the city’s share of the per-gallon fuel tax by a nickel was shot down by a 6-3 vote by the Honolulu City Council on Wednesday despite a direct, last-minute plea by the mayor to keep the measure alive.
Council members Ikaika Anderson, Stanley Chang, Ann Kobayashi, Joey Manahan, Ernie Martin and Kymberly Pine voted to defeat the proposal, while members Carol Fukunaga, Breene Harimoto and Ron Menor voted to keep the bill alive.
Caldwell said the increased fee would generate $15 million that would go toward road repaving and to restoring cuts made in bus service last year. He estimated the increase would cost $21 per vehicle annually. The administration, in its 2014 operating budget, is proposing $150 million be added for road repaving and that $3.5 million be added to restore bus service.
Meanwhile, Anderson introduced a new bill that would do away with a city fuel tax altogether and replace it with a county highway user fee that would be a cost of registering a motor vehicle.
A number of Council members began expressing reservations about hiking the city gas tax to 21.5 cents per gallon from the current 16.5 cents almost immediately after Caldwell introduced it on March 1, citing the amount of money that would have been raised was small compared with the paving and bus route restoration costs. But it was nonetheless a stunning defeat for the mayor because it is rare that such a major bill is rejected when up for the first of three readings required for passage.
Caldwell appeared before Council members, urging them to allow the bill to be debated further, even if they opposed the measure. "Let it live so that we can receive additional testimony on this very important measure," he said.
Both Martin, the Council chairman, and Kobayashi, the Budget Committee chairwoman, said the adverse reaction from the community was a key reason they decided to nix the proposal even before it had a committee hearing.
Kobayashi noted that the fee hike would not only be applied to motorists at the gas pumps, but also to all Oahu residents because businesses that make deliveries, transport people or otherwise rely on vehicles, would likely have increased costs that would have to be passed on to customers.
She also said that senior citizens on fixed income would be most affected by a per-gallon fuel tax increase.
Martin said his constituents who live in Central Oahu and the North Shore would be among those most affected because they live farthest from downtown Honolulu. He said officials from five different neighborhood boards in his district urged him to defeat it. Martin added that it was hard for him to justify voting for a 5-cent increase when he voted against a 1-cent increase two years ago.
Martin contends the need for the additional revenue from the tax hike could be offset by eliminating as much as $30 million in vacant job positions that are funded for the coming year.
"If those positions were so vital, they should have been filled very quickly," he said after the meeting.
Chang said that almost all of $100 million the Council earmarked last year for road repaving has yet to be spent.
"It seems to me, therefore, premature to be asking for a gas tax increase when they have really yet to demonstrate their capability of spending the money that already has been budgeted," he said.
Martin said more contractors "need to be encouraged to do this kind of work."
But Harimoto said he was inclined to explore a fuel tax hike further because it make sense to rely less on borrowed bond money to pay for road resurfacing.
"We’re borrowing over 25 years to pay for something that lasts maybe 15 years at best," he said. "Keep this option open just so we fully discuss funding issues and our commitment to maintain our roads."
Anderson proposed a new bill that would replace the existing 16.5 cents a gallon fuel tax with a county highway user fee. He told reporters after the meeting that he has yet to work out the details of how such a fee would be applied.
Anderson said a highway user fee would ensure the growing number of people who use electric vehicles would pay their fair share, which would not be the case were the fuel tax increased.
What’s more, Anderson said, gas tax revenues are not sustainable. Fuel tax revenues have declined for the better part of seven years while the number of registered vehicles on the island has increased by more than 20 percent in the same time period, he said.
Caldwell said he will continue to work with the Council to make improvements to the city’s roads.
"I’m going to keep fighting," the mayor said. "Obviously, I know this was a controversial measure. No politician likes proposing a tax or a fee. I think there was a direct nexus between this tax … and improving our roads that people are demanding be repaved and restoring our bus routes which people are demanding be restored."
Caldwell said he is open to looking at Anderson’s highway user fee plan. The mayor disagreed with Chang’s claim that money already allocated for road repaving has not yet been spent, arguing that it simply takes time to process the contracts.
A majority of those who testified on Wednesday said they supported the fuel tax increase, or at least keeping the proposal alive.
Richard Wallsgrove of the Blue Planet Foundation said it would be "a knee-jerk reaction" to reject the proposal before it was aired. "We have to be open to all the alternatives," he said, suggesting that a fuel tax "actually has wide public support … so long as there is a nexus between the tax and the solution."
