Honolulu City Council Proposal to Hike Fuel Tax Hurts Rural Residents Most

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By Donovan Dela Cruz

A City Council proposal to raise the county fuel tax will have the hardest impact on the residents of rural Oahu.

Under Resolution 10-70, Honolulu’s biodiesel fuel tax will increase from 8.25 cents per gallon to 9.75 cents per gallon. The fuel tax rate for other liquid fuels, including gasoline, will rise to 19.5 cents per gallon from 16.5 cents per gallon. If the tax increase is approved by the Council, residents could be paying more for fuel as early as July.

Revenue generated by the tax would be split between the city’s general fund and a new Property Assessed Clean Energy (PACE) program that would be used to fund loans for Oahu homeowners to install solar and energy efficiency improvements on their homes.

While I support clean energy initiatives, I cannot support funding the PACE program through a fuel tax that will hurt those who live and work outside the urban core. The PACE program would be better funded by general obligation bonds, which would distribute the financial burden of repaying the loan across the board, instead of putting that burden on the shoulders of rural residents, many who cannot afford to shoulder that burden.

A 3-cent increase per gallon of gas may not seem like a lot of money, but fuel costs will definitely add up for a housekeeper in Waialua who has to drive to work in Waikiki every day, or other residents living on the North Shore, Windward coast and Leeward areas who also have long commutes to their jobs.

The Legislature, in an attempt to make the state more self-sufficient and less oil-dependent, has already approved a bill that raises the tax on every barrel of oil that enters Hawaii from 5 cents a barrel to $1.05 per barrel. Gas prices will rise at the pump beginning in July, regardless of what happens to the county fuel tax proposal.

While it is important for the state to move away from its dependence on foreign oil, we really need to be mindful of the financial impact that fuel taxes have on low or middle income families living outside the urban center. Honolulu has a good transportation system in TheBus, but as a transportation alternative, it may not always be viable due to time or destination restraints.

Increased fees and decreased wages make it increasingly difficult for our families to balance their checkbooks, forcing them to choose between gas for their vehicles or food and medicine.

I understand the need to look for alternative forms of revenue, but I will not support a proposal that will hurt people already struggling to make ends meet.

Donovan Dela Cruz is the city councilman for District 2 (Mililani Mauka, Wahiawa, Waialua, Haleiwa, Waimea, Kahuku, Laie, Kaaawa) and a candidate for mayor in 2010