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Tax, fee hikes for state traffic plan fuel concerns from drivers

By Mari-Ela David - bio | email

HONOLULU (KHNL) - A day after the State announces a $4.2 billion dollar plan to improve roads and highways and reduce traffic, there are concerns about stretching taxpayer dollars thin in an already strapped economy.

What does this plan mean for people's wallets?

$170 in taxes and fees per year - that's how much more the State says drivers would pay if lawmakers approve the six-year Highways Modernization Plan.

"Registration is already expensive and gas is expensive on the Big Island so I would agree with maybe half of that tax," said Big Island resident William Kraft.

For Kraft's family, who just welcomed a new addition, they say the increases would be a burden.

"Diapers formula, everything else is going up so high, so it's kind of hard," said Carole Wilvur, a Big Island resident.

"Especially nowadays with a recession, a little extra money goes a long way but it's kind of hard to dig deep in your pockets for it at this time," said Kraft.

The costs break down like this:

The state gas tax, up $0.10 per gallon.

Car registration fees, up $20, from $25 to $45 a year.

Vehicle weight taxes, up $.02 per pound.

And the rental car surcharge tax, up from $3 dollars to $5 dollars per day, all to pay for more than $4 billion dollars worth of traffic improvements.

"We have to do something, we have to improve it. I was in favor of rail but it's going to be a long time off so it's not going to make a difference for a while. We do have to improve the roads," said Honolulu resident Lynn Stovie.

And then there's the general excise tax exemption.

"At the end of June of 2009, the GE tax on ethanol blended fuel which has been in effect for the last year and a half, will expire so we're looking at, if they do not continue that GE exemption, we're looking at $0.08 to $0.10 per gallon increase come the end of June already," said gas station owner Barney Robinson.

State leaders say in the long-run, taxpayers will save money.

"Save time, when you're not sitting in traffic, you're not using up gasoline, less maintenance on your car because the roads are in much better condition and of course a savings of lives," said Governor Linda Lingle.

The fee and tax hikes won't kick in until Hawaii sees a 1% job growth over two straight quarters.

The proposal still needs approval from the Legislature.

Lawmakers defended the proposed transportation project, saying that everyone has a responsibility.

"The public needs to determine what's more important in fixing their highways that has been neglected for years and suddenly we come down and say we're going to do it," said Rep. Joseph Souki.

"The general public really has to understand that first the fees don't go into effect immediately because we recognize that this is a bad economic time," said Senator J. Kalani English.

If the bill passes this legislative session, state leaders say the earliest the increased fees would take effect is sometime in 2012.