The final measure of a tax-trimming trifecta — a move to cut the gas tax by 10 cents a gallon — stalled Wednesday in the County Council.
Resolution 363 was postponed to May 4 at the request of its sponsor, Puna Councilman Matt Kanealii-Kleinfelder, when it became clear most if not all the other council members were about to vote it down.
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 county tax is in addition to 18 cents per gallon in federal tax and 16 cents in state tax.
Gasoline and diesel fuel prices remain high, with the average price per gallon for regular at the pump on the Big Island at $5.395 Wednesday.
Most of the half-dozen testifiers who addressed the issue at a Tuesday evening public hearing favored the tax cut, saying the high costs are making it difficult for them to make a living. Those opposed pointed out the rough condition of many island roadways, saying the county needs the money to fix them.
“Yesterday was a realistic reminder that while some may consider the decrease manini, but for those who must daily cross the island it’s not,” Kanealii-Kleinfelder said. “Ten cents a gallon is going to be a lifeboat for some.”
Dissenting council members were concerned there was no end date specified when the tax would revert to its current rate. Some said drivers driving less and using less gas is good for the environment.
“There is free bus service, there are other safety nets out there for other benefits in our community,” said Hilo Councilwoman Sue lee Loy.
Some wondered if the county could afford it and whether it would hurt federal matches for road repairs such as the $50 million Waikoloa Road project and the $20 million Hina Lani Street, both of which are shovel-ready, and Kilauea-Keawe Avenue, a $4.5 million project that is in the design stage. The federal government pays fourth-fifths of the cost to the county’s one-fifth.
In addition, said Public Works Director Ikaika Rodenhurst, the county has 250 road miles classified as poor condition that need resurfacing at a cost of $500,000 per mile. The county is currently trying to resurface 25 miles a year and hopes to increase that to 30 miles a year, he said.
“I certainly don’t want to be hamstringing the ability of Public Works to get these projects done,” said Puna Councilwoman Ashley Kierkiewicz.
Kanealii-Kleinfelder said the county can afford to do both.
“With revenue above projections, the argument that the county can’t afford the relief is unconscionable,” he said. “The county can be providing the relief and it has been overtaxing our residents.”
He said the county has a $20 million unspent balance in its highway fund, a fund that averages a $5 million to $8 million balance annually.
Finance Director Deanna Sako said the proposal would take about $7.5 million annually from county coffers, impacting operations for highway maintenance and police traffic services, while saving drivers about $1 or $2 per fill-up.
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. Gas taxes and general excise taxes have also been coming in higher than predicted, but the council so far hasn’t fully embraced the idea of relief for residents and businesses that were battered by the lingering fallout from the coronavirus pandemic that shut down much of the economy last year.
Two other measures were postponed Tuesday:
Resolution 291 authorizes the finance director to issue a $250 credit to be applied to the August real property tax bill of property in the homeowner’s class, except for those that failed to pay any portion of due taxes, properties assessed at the minimum tax rate, or properties sold during the taxable year.
Bill 156 would cap the value of property classified as apartment, hotel and resort, commercial, industrial, agricultural or native forests, or conservation at 15% of the previous year’s assessed value for that property.