COM 0950.003 2006-2008 - Laserfiche WebLink

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March 10, 2008 The Honorable Pete Hoffmann and Council Members Page 2 The reason why any increase in the fuel tax cannot be supported at this time is: • This proposed fuel tax increase is coming at an especially troubled time, as the economic forecast for the state and the nation is one of difficulty. This is accompanied by the reality of increases in the price of most goods in Hawaii due to the soaring cost of fuel. As we know, these price increases are directly related to the rise in crude oil prices to over $100 a barrel. It has been projected that gasoline prices on the mainland will rise in the coming months, with economists forecasting that gas prices may reach $4 per gallon on the mainland by this summer. Given that gas prices in the state of Hawaii are regularly higher than on the mainland, one can easily see the additional impact to our residents. • The island of Hawaii has many residents who live in isolated areas, necessitating long drives to reach their jobs and areas of recreation and shopping. Perhaps the most obvious districts of rural living that are so dependent on long commutes for jobs and shopping would be Hamakua, South Kona, Puna, North Kohala, and Kd'u. Individuals living in these districts would be hardest hit by any increase in the fuel tax. Should one review the average income in these areas, it is easy to note this tax would be more of a regressive nature than progressive as it would hurt those least able to afford the additional cost. This administration, along with the County Council, has focused on being prudent and fair in collection and expenditure of revenues. It is deeply appreciated that the Council has passed property tax measures that protect homeowners from inflation. Other tax measures adopted protect our agricultural lifestyle as well as encourage affordable rentals. These are all indications to our residents that Hawai`i's government recognizes the difficult times of many, and works to meet the established goals of being prudent and fair in the collection and expenditure of funds. As a point of information, a study done by the state in December 2006 showed that nearly one-third of Hawaii Island residents fall into the categories of homeless, at risk of becoming homeless, or "hidden homeless." This does not identify all of those who need to work more than one job to sustain themselves. An increase in the fuel tax would be regressive in the sense it would impact these individuals more than others. Should the Council and this administration feel that additional resources must be dedicated to roadway and highway maintenance and improvement, an alternative means of financing this would be through general revenues. It is strongly felt that this would be a fairer and more prudent way of addressing any funding needs for highway improvements at this time. This administration would support that. A gvv~~ Kim MAYOR