HILO — A gas tax hike is probably coming to a pump near you, but there will be less of an immediate sticker shock, following the County Council’s 8-1 vote Wednesday to spread Mayor Harry Kim’s requested increase more evenly over the next three years.
The change means the fuel tax hike must go out again to a public hearing. That’s tentatively scheduled for June 22 at the West Hawaii Civic Center, with a final council vote June 23.
Under the administration’s plan, the gas tax would have risen first from 8.8 cents a gallon to 19 cents, with increases of 2 cents in each of the next two years until it reaches 23 cents. The council’s formula changes that to a 6.2 cent increase the first year, and 4 cents in each of the next two years until it reaches 23 cents.
“Nobody in my district is happy about this. I’m not happy about doing it,” said Puna Councilwoman Eileen O’Hara, who proposed the change. “But I see the need. … It’s been long overdue and I’m really sorry we waited this long and had to have a big jump.”
Other council members, coming off a busy meeting week that included increases in property tax rates, were more reluctant. One cent of gas tax equals about $1 million more for the county, said Kohala Councilman Tim Richards, the sole no vote.
“It’s taking it out of a pocket … and putting it into the government’s hands,” Richards said. “The steep increase and then with the end goal of 23 cents. I’m not comfortable with that.”
A 19-cent increase would add $4.28 a month of tax to the bill of someone driving 10,000 miles annually, staff said.
The $4.28 a month average doesn’t sound too oppressive,” said North Kona Councilwoman Karen Eoff, adding that those with lower incomes likely live farther from their workplace, leading to more travel than average and thus a higher fuel bill. “It could be too much of a shock at the gas pump to the people who can least afford it.”
That sentiment was echoed by testifiers.
“Think about the ones who don’t have,” said former Puna Councilwoman Emily Naeole, one of a handful of testifiers. “A lot of these people are barely making it. Have some compassion. … You’ve got one job; a lot of us no more.”
It’s not likely the gas tax hike would go into effect until Oct. 1 at the earliest and perhaps not until Jan. 1, as the state Department of Transportation must implement it at the pump.
The Department of Public Works calculated the required rate hikes based on a drop in the county highway fund from about $13 million in 2011 to $5.2 million projected for this year. The gas tax, the weight tax on vehicle registration and the franchise tax on Hawaii Electric Light Co. and the gas company contribute to the highway fund.
“We didn’t just take 19 cents out of the sky,” said DPW Business Manager Aaron Brown.
The money would first be used to buy equipment to make the work more efficient, Brown said. Additional employees wouldn’t immediately be considered, he added.
“It’s not easy to do this,” said Deputy Finance Director Deanna Sako. “We understand there will be an impact on the community.”
Hina Lani Street in North Kona, Napoopoo Road in South Kona, Saddle Road in South Kohala, Kapaau Road in North Kohala, Kukuihaele Road in Hamakua, Wakea Avenue in Ka‘u, Kipimana Street in Puna and Wainuenue Avenue in Hilo are among the roads slated for work with the new money.
Money is allocated based on miles of roadway. That gives Hilo 30.7 percent of the fuel tax funds, Puna 20.5 percent, North Kona 14.5 percent, South Kohala 11 percent, Ka‘u 7.1 percent, Hamakua 6.7 percent, South Kona, 3 percent, North Kohala 2.9 percent.
“The only way we can fix these roads is to raise the rates,” said Hilo Councilman Aaron Chung.
Money would also be used for Mass Transit.
The county gas tax currently is the lowest in the state, bringing in just over $8 million. It was last raised in 1988. That compares to 16.5 cents a gallon on Oahu, 17 cents a gallon on Kauai and 23 cents a gallon on Maui.
Under state law, gas tax revenues can be spent on acquisition, designing, construction, improvement, repair, and maintenance of public roads and highways, new land, permanent storm drains, bridges, traffic control, street lights and power on county maintained public roads and highways and traffic control and safety on public highways and streets.
The money can also be used for payment of interest on and redemption of bonds issued to finance highway and street construction and improvements, for mass transit and the acquisition, design, construction, improvement, repair, and maintenance of bikeways.
Kona Councilman Dru Kanuha said the fuel tax is needed as a matter of public safety.
“The division is doing as much as it can with limited resources,” Kanuha said.
