A County Council panel is poised to consider a resolution aimed at taking some of the sting out of rising gas prices.
The council Finance Committee is scheduled Tuesday to take up Resolution 363, lopping 10 cents per gallon off the current 23 cents per gallon county tax.
Hawaii County’s average retail price for regular unleaded gas topped $5.35 a gallon on Thursday and the statewide average was $5.197, the highest recorded, according to the AAA gas prices website. Gas prices began rising after Russian invaded Ukraine in February.
“I’m listening to people say they have to choose between going to the grocery store and going to work,” Puna Councilman Matt Kanealii-Kleinfelder, the sponsor of the resolution, said Thursday. “As a small business owner, as Finance Committee chair, our responsibility as a taxing body is to lower taxes when we can for our residents.”
Kanealii-Kleinfelder said the county has money from other sources to cover the shortfall. Property values have increased by about 13%, adding $45.4 million to the record high $689.9 million proposed budget Mayor Mitch Roth unveiled last month.
A recovering tourism economy is contributing to a general excise tax surcharge account of $50 million, a $12.5 million, or 33.3% increase over this year.
“The state has a has a surplus $1 billion. … We’ve seen an increase in property values,” Kanealii-Kleinfelder said. “This is one of the things we can do to make the cost of living more affordable for our residents.”
The gas tax was 8.8 cents a gallon until 2017, when the County Council voted to raise it incrementally to its current 23 cents, the highest rate in the state for a county with by far the most miles of roadway. The county tax is in addition to 18 cents per gallon in federal tax and 16 cents in state tax.
Can the county afford a tax cut? Kanealii-Kleinfelder said Finance Director Deanna Sako was “my first phone call,” before filing the resolution. He said, “she didn’t love it, but she’d consider it.”
Sako, contacted Thursday, said it’s a balancing act. Gas tax money is used for roads, while Mass Transit projects recently have been tapping into the general excise tax and grants to improve its Hele-On bus system. She said the proposal would take about $7.5 million annually from county coffers, impacting operations for highway maintenance and traffic services, while saving drivers about $1 or $2 per fill-up.
”We are still reviewing the resolution and considering all of the impacts,” Sako said. “We do understand that many people are struggling right now with the various increases in prices, but many people are also complaining about the condition of our roads.”
The council Finance Committee meets at 2 p.m. Tuesday in council chambers in the county building in Hilo. For the first time in many months, the pandemic protocols have been loosened to allow in-person testimony. The public can testify in Hilo, or the Kona, Waimea and Pahoa council offices.
Remote testimony is also available. To provide oral testimony via Zoom: email councilremotetestimony@hawaiicounty.gov or call (808) 961-8255 to complete the registration process by noon, Monday.