Gov. David Ige wants higher gas tax and vehicle fees to fund road repairs

Gov. David Ige’s administration is proposing increases in the state gasoline tax, weight tax and vehicle registration fees to collect an extra $40 million a year for road maintenance and other highway projects.

In a bill submitted to lawmakers Monday, the administration proposed increasing the state gas tax from 16 cents per gallon to 22 cents per gallon for Oahu motorists, and from 16 cents to 21 cents per gallon on the neighbor islands.

The state Department of Transportation estimates that would cost an average Oahu motorist an extra $33 per year, although people who drive long distances or have less efficient vehicles would likely pay more.

This marks the third time the administration has proposed increasing the state gas and weight taxes and registration fees to boost the balance in the state Highway Fund, which pays for road maintenance and construction projects.

State lawmakers rejected the two previous attempts in 2016 and 2017, but last year passed a $2-per-day surcharge on car rentals by non-residents that is expected to contribute about $38 million a year to the Highway Fund.

Senate Transportation Committee Chairwoman Lorraine Inouye said Wednesday she favors the administration’s latest plan to increase the gas tax, and said she expects her colleagues also to support it. The Senate has approved previous proposed gas tax hikes, but they died in the House.

Senate Ways and Means Committee Chairman Donovan Dela Cruz, who is a powerful player in the Senate, said he is not so sure.

“It’s the guys who live in my district, if they work in Waikiki, they’re paying the burden,” said Dela Cruz, (D-Wahiawa-Whitmore- Mililani Mauka). “The guys from Waianae, Nanakuli, Hauula, they’re bearing the burden.”

“Even when I was on the (city) council, I always was opposed to gas tax because the people who don’t have too much choices on where they can live, they cannot live near where they work, that’s hard,” he said. Another concern is that the economy appears to be slowing, he said.

House Speaker Scott Saiki declined comment on the Ige proposal, and House Transportation Chairman Henry Aquino was unavailable for comment.

State DOT Deputy Director Ed Sniffen said the previous tax increases sought by the department were upward of $70 million to $100 million, but this year “we pared it down” because the surcharge on rental cars that was approved last year.

“For us now, we’re looking at ensuring that we have sufficient funding to ensure that we keep the system well maintained and safe for everyone,” Sniffen said. He said the funding would be divided between the islands “to ensure that we can get to potholes faster” as well as maintain landscaping and push for operational and safety improvements.

“This is to make sure that we can do our jobs better,” he said. “If we cannot get it, we’ll still do our jobs, but I think the normal (maintenance) cycles will be a lot more prolonged because we just can’t get to things quick enough.”

Lawmakers last increased the statewide gasoline tax to 17 cents per gallon in 2007. The tax then dropped to 16 cents per gallon at the end of 2015, according to data provided by the state DOT.

The state vehicle registration fee and weight tax were last increased in 2011, according to the state DOT.

This year, the Ige administration proposal in House Bill 1054 and Senate Bill 1280 would increase the annual registration fee from $45 to $50, and would increase the state weight tax from 1.75 cents per pound to 2 cents per pound for vehicles that weigh 4,000 pounds or less. Heavier vehicles would pay higher weight tax rates, according to the bill.

State DOT Director Jade Butay said construction prices for roadwork have been increasing, but revenue has stayed flat. “We just have more projects than we have funding, and we only have money now to really just maintain what we have,” he said.

Dela Cruz said state transportation officials “gotta make the case. The administration has to make a case for it. You have to balance raising taxes with providing additional opportunities for economic growth and personal income.”

BY THE NUMBERS

$33

Amount the proposed state gas tax increase would cost an average Oahu motorist per year

$27.50

Amount the proposed gas tax increase would cost an average neighbor island motorist per year

$5

Amount the proposed state vehicle registration increase would cost per vehicle per year

$8.75

Amount the proposed state weight tax increase would cost for a 3,500-pound vehicle