Pilot project looks to swap gas tax for use fee

Testifier concerns aired at Paia meeting

Scot Urada is state Department of Transportation project manager for a road-usage-fee pilot project, funded by a federal grant. Speaking at the Paia Community Center on Wednesday, he presented an overview of the project that proposes to swap the 16-cent fuel tax with a road-usage charge. The Maui News / DAKOTA GROSSMAN photo

PAIA — All 13 residents opposed a state Department of Transportation proposal to replace the 16-cent-a-gallon state fuel tax with a vehicle-miles-traveled charge to pay for new roads and repairs at a meeting Wednesday.

The road-usage-charge proposal being floated by the department is a per-mile-driven fee for vehicles, similar to utility bills. The department has embarked on this pilot project to seek a new funding mechanism for state highway projects and maintenance as revenues from the gas tax continue to decline due to more fuel-efficient cars and electric vehicles.

Testifiers offered their concerns at the meeting about how the road-usage fee would affect those who have to drive long distances, to work for example; would burden working-class families; and charge vehicle owners for travel not only on state highways, but county roads as well.

Residents in rural Paia, Haiku and Upcountry who attended the meeting said they felt as though they were being penalized for living in rural areas or taking long commutes to work. There also were questions about how the fee would work with tourists.

Kula resident Patrick “Kaeo” Ornellas said that the road-usage charge “is not going to work right now” because it would hurt working-class families and the senior population on fixed incomes.

Others were frustrated that most of the fees collected would end up on Oahu. While Maui has about 30 main state highways and roads, Oahu has about 90, according to department.

State Rep. Lynn DeCoite, whose district includes East Maui, Molokai and Lanai and was at the meeting, said that tourists should be treated differently than residents. “They use our roads, they use our infrastructure, and they’re clogging up Hana Highway,” she said.

She urged public comment on the proposal and noted that people traveling long distances still would be “subject to the road-usage charge” regardless of the measure because they are using more gasoline and will pay more gas taxes.

Rep. Angus McKelvey, who represents Lahaina, also opposed the road-use charge. In a letter to Gov. David Ige last week, the veteran lawmaker said that the proposal “would unfairly punish (West Maui residents) for the long distances we must travel.”

Department road-use fee project manager Scot Urada said not all of the questions posed have answers at this time. All concerns will be taken into consideration and included in the pilot project.

At the meeting, he said that the study to be developed will be able to determine specific impacts to low-income or rural households and offer possible remedies.

Hawaii’s Road Usage Charge Demonstration pilot project will assess whether there is promise in replacing the gas tax with a per-mile-road-usage charge for future roadway funding. The department was awarded a $4 million grant from the Federal Highway Administration for research over a 36-month period. 

The rate of the road-usage charge would be based on a typical car that gets an average of 22 miles per gallon. Drivers who fit within the that mile-per-gallon “sweet spot” of 22 mpg would essentially be paying the same amount as their neighbor, Urada said.

He estimated the median cost to be around $8 per 1,000 miles.

“Theoretically, it doesn’t matter if you’re paying for the road distance charge or if you’re paying for the gas tax. The cost remains the same,” said Urada. “If you have a gas guzzler, you might actually be paying a little bit less with a road-distance charge.” 

The proposal only would affect state tax revenue and benefit state roadwork, he said. While county gas taxes would remain the same, the data collected by research teams would be shared with the counties.

“We have a mission to provide safe, reliable and durable roads so people can get to wherever they need to go,” Urada said. “But unfortunately, for us to do that, we need money. That’s the bottom line.” 

The state highways fund currently receives 30 percent of its money through the fuel tax, 29 percent from the vehicle weight tax, 19 percent from the rental vehicle surcharge tax and 16 percent from car registrations. Overall, the state Department of Transportation collects around $250 million each year with $83 million specifically coming from the fuel taxes, Urada said.

However, with a shift toward energy-efficient vehicles (electric or hybrid cars), gasoline use and spending are down, which in turn mean less funding to maintain and service state roads.

“No matter the type of car, they all cause wear and tear on the roads,” he said. “Whoever uses the road, they need to all pay a fair share” of highway costs.

He suggested that rental and tour vehicles report their odometer readings at the end of their trip and be charged accordingly.

Step one of the project included the federal funding to conduct research. Step two, currently underway, includes sending customized invoices to registered vehicle owners in the mail. The invoices will include a side-by-side comparison of what the owner paid in fuel taxes in the previous year and what they might have paid with a road-use fee. Participants are encouraged to provide feedback after receiving the invoice. 

The calculations in the mailing were determined through safety check reports. By collecting previous mileage reports and using existing safety inspection data, the department will be able to determine a driver’s road usage, Urada said.

This step of the plan will occur over a year with around 1 million owners statewide involved, he said.

Another method of determining mileage is through telematics or automated mileage reporting. The research team will recruit around 2,000 volunteers from across the state, including 500 from Maui County, to report their mileage by using odometer readings via smartphone apps, digital mileage-meters and other technologies. Volunteers will be able to choose their own method of reporting, he said.

The final part of the project includes evaluation of the data and feedback collected. After the three years of data collection, project officials will present their findings to the state Legislature, which will decide whether to swap the fuel tax with a road-usage charge.

“In the end, we will try to identify possible ways to implement a road service charge in Hawaii,” he said. “Each one has its strength and weakness, and we’ll try to identify what those are. . . . This project is all about collecting information and researching an option that was identified . . . to look at the possible replacement of the gas tax.”

Issues raised by those testifying included:

• Privacy with the mileage reporting methods.

• How the road service charge will be collected.

• How the proposal may deter residents from purchasing electric/hybrid vehicles, which offer other environmental and energy benefits.

All questions will be looked at in more detail throughout the study, Urada said. The public is encouraged to visit www.HiRUC.org to learn more about the pilot project, receive meeting updates, ask questions and provide feedback.

* Dakota Grossman can be reached at dgrossman@mauinews.com.