State proposes nixing fuel tax in favor of charging you for how much you drive

State proposes nixing fuel tax in favor of charging you for how much you drive

HONOLULU (HawaiiNewsNow) - A third of the money for maintaining state highways comes from the fuel tax.

And that pot is dwindling as cars become more fuel efficient.

So the state is exploring a significant shift in how it gets key highways maintenance dollars from drivers.

Instead of taxing drivers at the pump, they’re proposing to set up a “road usage charge” that would be based on how many miles they drive. This way, an electric car would be charged the same as a gas-guzzling truck.

“As we’re going forward, fuel economies have changed. We’re looking at a better way to collect based on everybody’s road usage,” said Ed Sniffen, deputy director for highways at the state Transportation Department.

He added, "This is not for us to increase the revenue.”

HDOT has launched a three year, federally-funded project to study the possibility of the new tax, including what the cost per mile would be, the best way to bill drivers, and how to track a vehicle’s mileage.

Some options could include using high-tech mileage meters or apps to track mileage, purchasing permits to drive a set number of miles per year, or reporting how many miles you’ve driven during a safety inspection or car registration.

“We already have a (safety) inspection program that annually requires people to come in. That’s another way we could potentially get people to come in, take their mileage, and we’d understand what kind of mileage you had for the year,” Sniffen said.

The proposal comes as the state is already grappling to maintain Hawaii’s aging highway infrastructure.

The gas tax is currently 16 cents per gallon of gas.

Officials say that if something isn’t done soon, the fuel tax will almost certainly need to be dramatically increased. They predict the fuel tax would need to increase to 34 cents by 2035 just to meet current funding levels.

With the growing popularity of electric vehicles, or EVs, State Rep. Sylvia Luke, chairwoman of the House Finance Committee, supports researching an alternative to the gas tax.

“The fuel tax collected by the state has been dwindling,” said Luke. “In the past, it was in the range of a $30 million loss to the highway fund.”

But advocates of EVs say all vehicles should not be treated the same.

Greg Gaug, Vice President of Investments at Ulupono Initiative, says EV owners still pay registration fees and the weight tax, while reducing pollution.

“There’s different benefits that each vehicle brings to our communities, and those that are cleaner are more efficient, in my view, should be promoted and incentivized for people to at least consider,” said Gaug.

Opponents of the plan worry that it would also negatively affect rural drivers, long-distance daily commuters and the working poor.

“I don’t think I’d care for that because I drive from Kapolei to town and back, and I do a lot of driving,” said Kapolei resident Edward Comes.

Hawaii is among a dozen states exploring a change to the road usage charge.

To hear residents’ views on the switch, a series of public meetings have been set:

OAHU

  • March 20, from 6 p.m. to 8 p.m. at Kapolei High School cafeteria
  • April 16 (location TBA, check hiruc.org)
  • April 17 (location TBA, check hiruc.org)

KAUAI

  • March 22, from 5:30 p.m. to 7:30 p.m. at Wilcox Elementary Cafeteria
  • March 23, from 10:30 a.m. to 12:30 p.m. at Koloa Neighborhood Center

MAUI

  • March 25, from 5:30 to 7:30 p.m. at Lahaina Intermediate School Cafeteria
  • March 26. from 5:30 p.m. 7:30 p.m. at Baldwin High School
  • March 27, from 5:30 to 7:30 p.m. at Paia Community Center

MOLOKAI

  • April 2, from 5:30 to 7:30 p.m. at Kaunakakai Elementary School Cafeteria

LANAI

  • April 4, from 5:30 to 7:30 p.m. at Lanai Community Center

HAWAII ISLAND

  • April 9, from 5:30 to 7:30 p.m. at Natural Energy Lab in Kona
  • April 10, from 5:30 to 7:30 p.m. at Waimea School STEAM Center
  • May 9 (TBA, check hiruc.org)

For more information on the project, click here.

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