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The Honolulu Advertiser
Updated at 2:51 p.m., Thursday, January 22, 2009

State seeking tax, fee hikes for 6-year, $4B highway plan

By Mary Vorsino
Advertiser Staff Writer

The state is seeking increases in fuel and vehicle weight taxes and registration fees to help pay for a six-year, $4 billion highway modernization plan that would target congestion, pedestrian and road safety and backlogged maintenance.

The state would start collecting on a 10-cent per gallon fuel tax hike and the other increases in fees in about two years, when the economy is expected to be on the mend and job growth on the rise. Brennon Morioka, state Transportation Department director, said the fees would be triggered by 1 percent job growth over two consecutive quarters.

The increases in fees and taxes would cost drivers about $170 more a year.

But Morioka said the increases would be outweighed by the comprehensive modernization plan, meant to do everything from cut the amount of time people are stuck in traffic to target backlogged needs for bridges, rutted roads and out-of-sync traffic signals.

"Business as usual is simply not working," said Morioka, at a news conference today. "We must drastically change the way we manage our highways."

State Sen. Kalani English, chairman of the Transportation Committee, backed the plan, saying drivers have long been calling for improvements. He said the hit to taxpayers' wallets is a necessary evil, given the state of the highways system.

"We had to find a way to fund it," he said.

The increases in taxes and fees would generate enough money to cover $2 billion in highway bonds, which would be paid back over about 30 years.

An additional $500 million would come from the federal government, and the remaining $1.5 billion represents the average maintenance and capital improvements appropriations that state highways would already have gotten, even without the plan.

The tax and fees increase proposals will be submitted to the state Legislature for approval. The fuel tax increase would bring the total state fuel tax per gallon to 27 cents.

The state is also seeking an increase in vehicle weight taxes, from three-quarters of a cent per pound for vehicles up to 4,000 pounds to 2 and three-quarters cents per pound. Motor vehicle registration fees would be increased from $25 a year to $45 a year.

Also, the rental vehicle surcharge tax would rise from $3 a day to $5 a day.

Reach Mary Vorsino at mvorsino@honoluluadvertiser.com.