Hawaii Pitches Tax Increase to Raise Funds for Major Highways

Sun February 15, 2009 - West Edition
Mark Niesse - Associated Press




HONOLULU (AP) Gov. Linda Lingle and state transportation officials proposed a nearly 60 percent increase in the state tax at the gas pump and big hikes in other fees to raise money for major highway improvements on four islands.

The increases, all focused on motor vehicle use, would not take effect until the number of jobs in Hawaii starts increasing, which officials believe will take at least two years. Construction on the more than $4 billion in new projects wouldn’t start until then.

The Republican governor’s plan would hike taxes by about $170 a year per resident, but the payoff would be a 30-minute decrease in average daily commutes. Key Democratic legislators endorsed the plan and say it would help stimulate the declining economy.

Over six years, the Hawaii Modernization Plan would focus on 183 projects — 76 on Oahu totalling just over $1.9 billion, 36 in Maui County for $579 million, 27 on the Big Island for $525 million, and 22 on Kauai at $263 million. Nearly $968 million more would cover 22 statewide projects.

The projects include new lanes to decrease congestion on several major Oahu roadways, but also include protection of shorelines, replacement of rural bridges, reinforcement of rocky cliffs and pavement improvements on other islands.

State Transportation Director Brennon Morioka said the plan would help save lives, cut travel times and save Hawaii residents money in the long run.

“It’s about preserving and improving our special way of life here in Hawaii. It’s about ensuring a quality of life that we’re all hoping for, and it’s about putting money back into the pockets of our families,” Morioka said at a news conference with the governor and Democrats who oversee transportation issues in the Legislature.

The spending would have to be approved by the Democrat-controlled Legislature and could undergo several changes before adjournment in May.

“It will be quite a stimulus for the economy,” said Rep. Joe Souki, D-Waihee-Wailuku, chairman of the House Transportation Committee. “We’ll be putting people back to work, and at the same time improving safety.”

The tax increases would take effect when the number of jobs in the state increases by 1 percent for two consecutive quarters.

The state tax on gas at the pump would be raised by 10 cents per gallon to a total of 27 cents — a 59 percent increase. Drivers also pay 18 cents per gallon in federal fuel taxes.

Vehicle registration fees would be raised 80 percent, from $25 to $45 per year.

And the state’s vehicle weight tax that is paid annually by motorists would nearly triple, from three-quarters of a cent per pound to 2 and three-quarters cents per pound.

State fees on rentals would go up 67 percent to $5 per day.

“The business as usual approach would be to continue to limp along and keep things up as best we can. Commute times will continue to increase over time, and people will be stuck in traffic longer and longer,” Lingle said at the news conference. “We’re not going to sit here and wait until things get better and then try to come up with a plan.”

The governor said the legislation builds on her goal of reducing the number of average annual traffic deaths in Hawaii by 40, to 100 per year.

Besides highway upgrades, the measure calls for intersection improvements, more pedestrian walkways, reversible lanes, rideshare programs and a freeway incident cleanup patrol.

It also includes a provision to test a system that would eventually phase out fuel taxes, replacing them with taxes on miles traveled because more people are driving fuel-efficient cars.

The tax increases would raise about $170 million annually, which would be used to pay off $2 billion in bonds for these projects. The rest of the plan’s $4 billion cost would be paid for by $1.5 billion in existing transportation funds, and $500 million in federal money that will be sought.

Until the tax increases kick in and construction can begin, work will continue on construction designs and less-expensive improvements.