General Questions about HiRUC
RUC is a way to pay for roads and bridges based on how many miles we drive, instead of a tax on how many gallons of gas we buy.
In Hawaii, gas taxes are the largest source of funding for the safety, upkeep, and improvement of public roads and bridges. The state gas tax is 16 cents per gallon. The federal government and counties also collect fuel taxes. As Hawaii gets closer to the goal of 100% clean energy by 2045, many people are buying more fuel-efficient cars and trucks. Fewer gallons of gas sold means less gas tax collected. RUC is a possible way we could pay for our roads and bridges in a future without gas taxes.
In addition to paying gas taxes by the gallon, Hawaii drivers also fund roads through vehicle weight taxes and registration fees. Surcharges on rental cars and tour vehicles also contribute. The Hawaii Department of Transportation (HDOT) has investigated the pros and cons of raising these fees along with other options for road and bridge funding, including a higher general excise tax (GET) or income taxes. Highway tolls have been implemented in other states.
The Hawaii Road Usage Charge Demonstration project, or HiRUC, is a three-year research effort led by HDOT where drivers experienced what it would be like to pay for roads through a per-mile charge, without owing any real money.
Vehicle mileage was calculated based on odometer readings collected during vehicle inspections. The majority of vehicle owners received a Driving Report in the mail that showed how many miles they drove in the past year, how much gas tax they paid, and how much they would owe under a RUC instead. Mailers were sent from July 2019 to Dec 2020. Use the Online Estimator to create your own customized Driving Report.
Throughout the project, HDOT sought input from the public, and throughout the demonstration, drivers were asked their opinions and experiences. The results of the demonstration project, including community meeting comments, over 40,000 survey responses and feedback from Technology Test Drive volunteer participants, will be shared with elected officials for consideration to address Hawaii’s roadway funding challenges.
[GGF1]Link to Online Estimator
Hawaii’s fuel tax decline is expected to be faster than most since we are leaders in transitioning to cleaner, more efficient vehicles. Many states face challenges in funding roads and bridges. About a dozen states have examined RUC. Several have conducted statewide pilot tests, including Oregon, California, Washington, Colorado, Delaware, Pennsylvania, and Minnesota. Oregon has had a RUC in place since 2015 for some vehicles. Utah enacted new registration fees on hybrid and electric vehicles in 2019 and is now offering a RUC as an alternative to those fees. New Zealand drivers of diesel vehicles have paid a RUC to fund roads since 1978, and soon EV drivers will pay a RUC there too.
According to initial research by HDOT, residents of rural areas and outlying suburban areas tend to drive older cars with less fuel efficiency. This means they pay more now under the gas tax. If a road usage charge system replaced the gas tax for all vehicles, drivers in these areas would, on average, save money. HDOT is examining this question in more detail as part of the HiRUC research.
As it stands, the gas tax will fade away gradually as drivers buy less or stop buying gas. The state and counties must choose whether to keep the gas tax in place even as it diminishes. HDOT’s research assumes that for Hawaii, a RUC only will work if it replaces the gas tax for the vehicles it applies to.
The purpose of the gas tax is to fund repair and maintenance of roadways and bridges, not to discourage people from driving any type of vehicles (which today are mostly gas-powered). HDOT is focused on ensuring equitable and sustainable funding for roadways and bridges. This research is looking at how a RUC might impact future car-buying choices. Driver and general public input was gathered and gather information to understand purchasing decisions. Feedback from electric vehicle owners was particularly important. HiRUC will present a range of options for elected officials to consider to ensure that a RUC aligns with state energy goals.
Rental car drivers today pay gas taxes. Under a RUC, rental car companies could be assessed the per-mile charge and pass the cost along to their customers.
Vehicles under about 10,000 pounds cause the same level of pavement damage. These include passenger cars, pickups, and SUVs. Vehicles more than 10,000 pounds cause more damage that increases with weight. Those vehicles pay diesel taxes and weight taxes for road maintenance. The RUC research is focusing on passenger vehicles weighing less than 10,000 pounds because this vehicle category is quickly growing more fuel-efficient and eroding gas tax revenue.
Getting a vehicle inspection is each driver’s responsibility. HDOT’s research is looking at how to ensure correct reporting of odometer readings and detecting odometer fraud.
There are options for enforcing an odometer-based or technology-based mileage reporting. HDOT will research and provide recommendations to the Legislature for viable approaches.
That is an option in the near-term. Drivers are using less gas overall. This means a smaller number of drivers of older vehicles pay more, while drivers of newer and more fuel-efficient cars pay less and it’s not tied to their usage of the roads. If the state transitions to a road usage charge, it means all drivers would pay the same amount per mile, regardless of what they drive.