Lawmakers consider tax increases to help fund state highway system
HONOLULU (HawaiiNewsNow) - It may soon cost you more to drive your car.
Lawmakers are trying to decide which of your taxes to raise to help operate and maintain Hawaii's highway system, including one proposal that would have changed the vehicle tax system entirely.
The state Department of Transportation says it desperately needs $100 million for the State Highway Fund, but most of the department's tax increase bills have been killed this legislative session.
The last surviving proposal would have replaced the current weight tax for vehicles with a tax based on the cars value instead – the more expensive the vehicle, the more tax the owner pays.
Historically, the current weight tax has been rationalized with the idea that drivers with heavier vehicles should pay more because of the added wear and tear to the roads.
Transportation officials had hoped changing to a tax based on value would help generate more money.
"Every single bill I've introduced this session has been killed for one reason or another," said Ford Fuchigami, Director of the Department of Transportation. "If I don't support this particular bill, it will be deferred and I will have nothing."
Critics say it's unfair to those who buy new or luxury cars, adding that the proposal could cause chaos with the vehicle registration process, since the city still uses a weight tax.
"Not only would we have to calculate weight at the county level, but now they want to throw in a value system on top of this. It would choke up the system beyond ability," said David Rolf, Executive Director of the Hawaii Automobile Dealers Association. "And for a new car, because it's not depreciated enough, the tax would go up maybe 235-percent."
So far, lawmakers are struggling with the issue. The value tax was already approved by the House, but the Senate Transportation Committee on Monday voted instead raise the fuel tax by six cents per gallon for regular gas, as well as two cents per gallon for diesel.
Hawaii has one of the lower fuel tax rates in the nation.
The two houses will have to find a way to agree on the issue within the next month.
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