State looks at option of mileage-based user fee over fuel tax

A shift towards electric and hybrid vehicles has put the state in a bind.

So it’s looking to possibly tax drivers based on how far they go instead of how much gas they buy.

A few weeks ago, KHON2 reported how the state could replace the gas tax with a fee that would charge you based on your mileage.

The state is looking into it to help raise more money to fix our highways.

Right now, the gas tax helps pay for that.

But with more fuel efficient cars on the road — the state is making less money.

Today, KHON2 learned the state will spend millions of dollars to test a mileage based fee.

By the gallon or by the mile. That’s the question the Hawaii Department of transportation is hoping to answer with a new study set to conclude in 2019.

The project will be rolled out in six phases and will involve over 1 million people.

Shelly Kunishige with the DOT says the first step is having drivers manually report miles to see how much road drivers are using. “Right now we are looking at basically based on what you use. So right now with the gas tax you’re kind of limited by your car’s gas mileage and other factors.”

The projected cost of the project will come in around $19 million. So who’s footing the bill? $6.5 million dollars is federal money. The state will chip in another $1.5 million. The final $11 million will be provided by what’s called in kind contributions by the 1.1 million drivers who participate which is about 10 dollars per car.

For people that live on the West side or the North Shore, Kunishige says there’s a chance a mileage fee could work to their benefit. “All the way in the countryside a lot of our research has determined those folks generally tend to drive older vehicles vehicles with lower gas mileage so this could actually end up reducing the amount they pay. For people with electric vehicles it could end up costing more but really this is part of the demonstration to show how we would assess fair fees.”

Representative Andria Tupola says she wants to make sure that the public understands the study, and what it will mean to Hawaii drivers. “My concern is that we already have a lot of taxes so even if they were to switch it I don’t know if it would be easy for the public to buy into a new system, especially if you have to pay a registration fee and then pay tax on your mileage at the same time.”


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