Instead of paying a per-gallon gasoline tax, drivers pay to use roads based on how many miles they drive.
Public roadways in Hawaii are largely paid for with the gas tax, weight tax, rental vehicle surcharge, and registration fees. To fund state highways, Hawaii drivers pay a tax of 16 cents per gallon of gasoline. The federal government and counties also collect fuel taxes.
As Hawaii residents buy more fuel-efficient or alternate fuel vehicles, they consume fewer gallons of gasoline. Consequently, the amount we pay in gas tax also declines. The state and counties depend in large part on gas taxes for road upkeep and improvement. The Hawaii Department of Transportation (HDOT) is examining RUC as a possible alternative that could ensure fair and sustainable funding for our roads.
The Hawaii Road Usage Charge Demonstration project, or HiRUC, is a three-year research project led by the HDOT that has drivers experience what it would be like to pay for roads through a per-mile RUC. HiRUC looks at a possible replacement of the existing 16 cent-per-gallon state fuel tax with an equivalent per-mile charge.
Each vehicle’s mileage will be calculated based on odometer readings collected during annual safety checks. Beginning in late 2019, vehicle owners will receive a driving report in the mail showing how many miles they drove in the past year, how much they may have paid in gas tax, and how much they might owe if the state were to collect a road usage charge instead of the gas tax. Since this is just a research and demonstration project, no one will owe any money.
The HDOT will also recruit volunteers who are willing to test other automated ways of collecting vehicle mileage, including plug-in vehicle mileage meters. Throughout the demonstration project, drivers will be asked what they preferred – and what would have to change – if the state were to adopt a RUC in the future. The results of the demonstration project, including direct feedback from drivers, will be shared with elected officials for consideration to solve Hawaii’s long term roadway funding challenges.
Yes, there are other options to fund road maintenance, including an increase in vehicle registration and weight fees, increasing the gas tax, increasing sales taxes, or diverting state money from other publicly funded programs. Some states use toll collections on the highways. HDOT has investigated the pros and cons of many of these alternatives. Some alternatives have been implemented in the past decade in other states and HDOT has been studying their progress. RUC has pros and cons, but also has promise to provide fair and sustainable highway funding.
Hawaii’s fuel tax decline will be sharper than most since we are among the nation’s leaders in transitioning to a cleaner, more efficient vehicle fleet. Other states are facing similar challenges in funding roads and bridges. About a dozen states have examined RUC. Several have conducted statewide pilot tests, including Oregon, California, Washington, Colorado, and Minnesota. Oregon implemented a live system with more than 1,000 volunteers in 2015, and the state is expanding the program. California conducted a pilot with 5,000 volunteers testing various methods of reporting mileage in 2016. Washington recently completed a pilot with 2,000 volunteers. Internationally, New Zealand drivers of diesel cars have paid a per-mile fee to fund their roads since 1978.
How will road usage charges impact rural households, low-income families, households with electric cars, and visitors?
Impacts will vary depending on individual circumstances. In general and looking at an overall average, under RUC, everyone would pay the approximately same amount per mile driven as the average driver pays today in gas tax. HiRUC will study the specific impacts to help everyone understand them better and so our elected officials can make informed choices about future transportation funding policies for the state.
Your input is important and we want to hear about your experiences, concerns, preferences, and ideas. We welcome input all throughout the project. There are also specific opportunities to learn more and weigh in at community meetings and volunteer opportunities to engage with the project. Visit www.hiruc.org to follow the latest on HiRUC.