Owning a car could soon become more expensive as lawmakers consider increases to the state’s fuel tax and vehicle registration fees.
The move, as proposed to the state Legislature earlier this session, would bump fuel prices by 3 cents per gallon as transportation officials seek more revenue to improve Hawaii’s highways.
But perhaps the largest sticker shock would come when motorists renew their vehicle registration.
Under the proposal submitted by Gov. David Ige, registration fees would increase by $15, in addition to an extra penny per pound vehicle weight tax.
Combined, that works out to an extra $32.40 in registration costs for the owner of a Toyota Camry.
Laurie Elizares, owner of Shaka! Taxi and Tours, said both hikes would put a squeeze on her business.
“That would be pretty dreadful,” she said.
“That’s already high,” Elizares added, regarding registration fees, “and they are going to increase that?”
DOT officials say the fuel tax and fee hikes would raise an extra $45.1 million a year, revenue they say is needed for road maintenance and widening projects.
“At this time, the needs of the highways system already outweigh available funding,” the department said in written testimony to lawmakers. “… The current fee structure is not sustainable for future highway funding.”
A DOT spokesman did not respond to an email and voicemail requesting comment on what Big Island projects are likely to benefit from the additional revenue.
The measure faced swift criticism from those who say the state is overreaching.
In testimony submitted to the Senate’s Transportation and Energy Committee, the Tax Foundation of Hawaii noted the state still has a backlog of more than $650 million in federal highway funds.
“It’s apparent that the Department of Transportation needs to implement more efficient spending practices … prior to squeezing the taxpayers for more and more funding,” the organization wrote.
Additionally, the proposal increases the tax for diesel oil and aviation fuel from 1 cent to 2 cents per gallon.
The committee voted in favor of the measure Wednesday after striking references to the tax and fee amounts, a move that will keep the bill alive for further discussion.
If adopted, Hawaii would still have a lower-than-average fuel tax.
The average state base tax is about 23 cents per gallon, according to the U.S. Energy Information Administration.
Hawaii’s base
tax is 16 cents per gallon. The increase would bring it to 19 cents.
The registration fee hikes wouldn’t be the first Big Island drivers have seen in recent years.
In 2014, the state increased vehicle safety inspection fees by $4.49 to pay for a new electronic inspection system.
That followed the County Council approving registration fee increases in 2013 that saw its share go from $5 to $12.
It also raised weight taxes from 0.75 cents per pound to 1.25 cents per pound.
For a Camry owner, those changes resulted in an annual fee increase of $24.70.
That year, bus fares in Hawaii County doubled from $1 to $2.
Email Tom Callis at tcallis@hawaii
tribune-herald.com.
