HomeMy WebLinkAboutCOM 0950.003 2006-2008
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Harry Kim Dixie Kaetsu
Mayor t~ Managing Director
s;•: ` Barbara Kossow
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Deputy Managing Director
Countp of'Wabiai`t
891 Ululani Street • Hilo, Hawaii 96720 • (808) 961-8211 • Fax (808) 961-6553
KONA: 75-5706 Kuakini Highway, Suite 103 • Kailua-Kona, Hawaii 96740
(808) 329-5226 • Fax (808) 326-5663
March 10, 2008 0
The Honorable Pete Hoffmann, Chairperson, and Members OCR
Hawaii County Council z
333 Kilauea Avenue ti FTi
Hilo, Hawaii 96720
SUBJECT: Resolution 504-08, Draft 2 i +
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Extending Hawaii County Fuel Tax Program c 1'
r
Dear Chairperson Hoffmann and Council Members:
This is written to convey the support of this administration for the continuation of the current
8.8¢ per gallon County fuel tax, and to explain why an increase above the present 8.8¢ is not
supported.
The position of maintaining the 8.8¢ is based on the following:
• The Department of Public Works has done an admirable job over the past few years in
the maintenance and improvement of County roads. The revenues and resources to
address their responsibilities come primarily from the fuel tax, vehicle weight tax, and
public utilities franchise tax. In addition to these sources of funds, supplemental
revenues were sought and obtained from:
o The State of Hawaii in the amount of $2 million for assistance with the so-
called "roads in limbo."
o A special bond for road improvements in the amount of $47 million that was
proposed and approved by the County Council in 2004.
o Federal funds.
• It is the intent and policy of this administration to continue seeking any and all funds
to supplement the fuel tax, vehicle weight tax, and public utilities franchise tax in
continuing the task of maintaining and improving our current roadways, and planning
and constructing new roads and highways. This includes the priorities of pedestrian
walkways and bikeways.
• It has been the policy of this administration for the past years to ensure private
developers' participation whenever possible. This includes expediting the opening of
roadways such as upper Lako Street, the Mamalahoa Bypass, and especially making
sure that future planned developments are properly planned for road connectivity.
Comm. No. 9 ~;C) • 3
Ref. To: t; s*r.1ed CMA,
Hawaii County is an equal opportunity provider and employer. Ref. Date MAR L PU
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