The Honolulu City Council is considering a bill that would lower the motor vehicle weight tax by approximately 20 percentage points.
Bill 47, proposed by Chair Tommy Waters, aims to lower the motor vehicle weight from 7 cents per pound of vehicle net weight to 5.5 cents per pound for vehicles under 6,500 pounds and from 7.5 cents per pound of vehicle net weight to 6 cents per pound.
Waters says the bill will make Hawaiʻi more affordable.
“For most Oʻahu families, the car is a necessity. Lower registration fees mean real savings that households will see year after year,” he said at a city council meeting on June 30.
Department of Transportation Services Director J. Roger Morton asked councilmembers to consider the tax in connection with total transportation funding. He testified Wednesday morning that the 1.5% decrease in the motor vehicle weight tax would lead to approximately $39.5 million in revenue loss.
“$40 million in loss is about the same amount as what we spend every year on road resurfacing,” he said.
Oʻahu has the highest motor vehicle weight tax in the state, compared to 3.5 cents per pound on Maui, 2 cents on Kauaʻi County and 1.75 cents in Hawaiʻi County for passenger vehicles.
“We recognize that the highway registration tax is higher on Oʻahu than it is on the Neighbor Islands, but we also have the lowest gas tax of all the counties,” Morton said. “The reality is for Oʻahu is that we are a heavily urbanized area and the cost of road maintenance is higher than on our Neighbor Islands.”
Department of Consumer Services Director Kimberly Hashiro wrote that the city and county would lose a significant amount of revenue dedicated to the City’s critical transportation infrastructure. This could impact the maintenance and repair of public roads and highways, installation, maintenance, replacement and repair of street lights and power, traffic control on public highways and streets, mass transit and the improvement, repair and maintenance of bikeways.
Councilmember Esther Kiaʻaina expressed concerns about the loss in revenue and voted with reservation and asked if the council could tailor the exemption to kupuna.
The City and County of Honolulu currently allows Oʻahu veterans ages 65 years and older to have a $20 county motor vehicle registration fee exemption.
Dalam Kam said Wednesday afternoon that he would like to see the council ensure affordable travel options for public transit users.
Cody Sula, of the Hawaiʻi Ironworkers Stabilization Fund, said that the lower tax could make Hawaiʻi more affordable for residents.
“When you have a family, when you have multiple vehicles, that $45 to $60 can add up,” he said.
Rep. Darius Kila said that while some residents may not have an issue paying the motor vehicle weight tax, affordability is a real concern for his constituents who have no practical alternative to get to work and school.
Oʻahu Metro Planning Organization opposes the bill, writing that the reduction in revenue could impact the City and County of Honoluluʻs ability to implement projects in the Oʻahu Regional Transportation Plan 2050 and the Transportation Improvement Program.
“Stable and flexible local funding is essential to advancing ORTP 2050 goals, including maintaining a safe, resilient, and multimodal transportation system. Reductions in county revenue may delay or constrain critical investments in roadway maintenance, complete streets, and safety improvements,” the organization wrote.
Oʻahu Metro Planning Organization also expressed concern that the lower vehicle weight tax could incentivize residents to purchase and use heavier vehicles, which could contribute to increased road wear and increased safety risks.
Ted Kefalas, of Grassroot Institute of Hawaiʻi, wrote in support of the bill.
“This measure will make transportation more affordable for Honolulu residents struggling with high gas prices. Saving $45 will not be a make or break most residents, but it will help mitigate the affordability crisis that most people deal with everyday,” he said.
Haley Lehman can be reached at haley@alohastatedaily.com.
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