DAVID Y.

IGE

FORD N. FUCHIGAMI

GOVERNOR

DIRECTOR
Deputy Directors
JADE BUTAY
ROSS M. HIGASHI
EDWIN H. SNIFFEN
DARRELL T. YOUNG

STATE OF HAWAII
DEPARTMENT OF TRANSPORTATION
869 PUNCHBOWL STREET
HONOLULU, HAWAII 96813-5097

IN REPLY REFER TO:

FREQUENTLY ASKED QUESTIONS FOR SB2938 INVOLVING

TRANSPORTATION FUNDING USER FEE ADJUSTMENTS
HONOLULU The Hawaii Department of Transportation (HDOT) is requesting $70
million in additional funding for its Highways Program. The additional funding would
increase resources utilized to provide a safe, efficient, accessible, well maintained, and
sustainable transportation system to all users. HDOT requests that user fees collected
through fuel sales, State motor vehicle registration, and the State motor vehicle weight
fees (Senate Bill 2938) be increased to provide the additional funding. The adjustment
would help HDOT catch up with maintenance of the States aging system, expedite
shoreline protection mitigation to preserve our coastal highways, provide operational
congestion relief at key bottlenecks, deliver on key widening projects, and implement its
Intelligent Transportation System Statewide.
Currently, there are 1.3 million registered vehicles in the State of Hawaii, one for each
man, woman, and child living in the islands. The amount of cars and people continue to
rise, but our ability to add more lanes for drivers is severely limited due to land
restrictions and funding. We simply cannot build ourselves out of congestion.
Therefore, HDOT is focusing its resources toward making the system that we have work
better. We are holding the safety and maintenance of the highway facilities as the #1
priority. We are putting nearly 80% of highways funding into repaving and
reconstructing roads, repairing and rebuilding bridges and tunnels, revising bike and
pedestrian facilities, and reconfiguring roadways to be safer. From a regulatory
perspective, this approach is what is required by the Fixing Americas Surface
Transportation Act (FAST), the new funding legislation for the federal highways
program. From a practical perspective, if we dont refocus the program in this way, the
system will degrade, the roads will be less safe, and interruptions to commutes will
increase.
With the bulk of HDOT funding going towards safety and maintenance, only a small
portion of the funds will be available for projects that would add lanes. Therefore, we
will not be able to afford projects that widen freeways and highways. Instead, HDOT
will be looking at solutions that will bring immediate congestion relief at lower costs and
with shorter lead times. These solutions include retiming signals and upgrading
equipment in corridors, adding contraflow operations in congested areas, using more
shoulders as travel lanes during peak hours, adding traffic control to busy intersections,
and building out transportation systems that allow us to control signals remotely and
inform the public of any incidents or delays. These changes can be implemented faster
and cheaper than building new roads.

At this time, the needs of the highways system already outweigh available funding.
Therefore, if revenues are not increased, more of the available funds will be repurposed
to safety and maintenance, and it would be difficult to see much funding being available
to address congestion and delay. The current fee structure is not sustainable for future
highway funding.
Below are frequently asked questions and responses on the subject.
How much money is HDOT looking to raise with the proposed adjustment?
HDOT is seeking to generate an additional $70 million a year for the State Highway
Fund. An estimated $25 million from the vehicle weight fee, $35 million from the motor
vehicle registration fee and $10 million from the two cent increase in the fuel fee.
How much will the proposed increases cost an average driver?
The amount varies depending on a variety of factors. The more fuel you consume, the
heavier your vehicle weighs and the amount of vehicles you own will impact the amount
you pay. The proposed increases are expected to cost the average driver an additional
$77.50 per year.
How much more will drivers pay with the proposed adjustments?
We anticipate that the adjustments would result in the following approximate additional
costs to drivers per car.
Fuel Fee = about $11 on average considering about 12,000 miles traveled per year with
a fuel efficiency of 22 miles per gallon
Weight Fee = about $35 on average considering a 3,500-pound vehicle
Registration Fee = $31.50
Does HDOT receive money from the General Fund or income tax?
The Hawaii Department of Transportation is self-sustaining, meaning it does not use
money from the General Fund. HDOT does not receive money from the General Excise
Tax (GET), income tax or sales tax. Instead money comes from the State Highway
Fund, which is funded by the users of the highway system.
How much funding does HDOT currently receive?
HDOT Highways Program receives approximately $270 million in revenue from the
Highways Special Fund and $171 million in fiscal year 2016 from the Federal Highways
Administration, with incremental increases each year reaching $187 million by fiscal
year 2020.
What is the money used for?
The money collected from the user fees pays for all costs associated with operating and
maintaining the highway system including facilities, staff, and equipment. Additional
funds raised through increases in the user fees would be used to expedite needed
maintenance and system reconstruction projects including shoreline protection, install
more equipment that enhances operations and safety, and allow HDOT to move forward
with widening projects. The funding would also provide a source for emergency repairs
that may not have been budgeted. Recent examples of projects that used this money
include the emergency project in Kaaawa which stabilized Kamehameha Highway after
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suffering erosion damage; the emergency repairs in the Wilson Tunnel on the Likelike
Highway; and the current replacement of the ventilation fans within the Tetsuo Harano
Tunnel on the H-3 Freeway. Many projects are emergency based and would have
significant impact without swift and immediate action. Currently, emergency projects
are funded by pushing other needed projects back to the following year.
How does HDOT pay for maintenance and improvements?
The money used to operate and maintain more than 2,500 lane miles of State roadway
comes from the State Highway Fund and the Federal Highways Administration. This
money is generated from fees collected from highway users.
What if I dont own a vehicle?
If you do not own a vehicle you will not pay for any of the fees collected for the State
Highway Fund. Although non-vehicle owners do not directly add to congestion and
impacts to the system, they still benefit from the highways system if they take public
transportation that utilizes our roads and property, and if they consume goods brought
in through State harbors and airports and delivered on the highway system.
Why do you collect a fee based on vehicle weight?
This is a specific user fee. Heavier vehicles cause more wear and tear on the
roadways.
Does my compact car pay the same as a big truck?
The State vehicle weight fee is based on a tiered system. Those tiers would be
increased one penny per pound and the lighter the car, the less you pay. The exception
is vehicles weighing more than 10,000 pounds which pay a flat fee. The proposed
annual flat fee would increase $100 from $300 to $400.
Is HDOT asking for a 2 cent or 3 cents per gallon increase on fuel?
On Dec. 31, 2015 a one cent fee per gallon of fuel was repealed (Act 188 SLH 2012).
Currently the fuel fee is $0.16 cents per gallon of gasoline and diesel. HDOT is asking
the State Legislature to restore the one cent fee which would bring it back to $0.17
cents (as it has been since 2007) plus an additional two cents increase per gallon
bringing the total to $0.19 per gallon.
Are diesel and aviation fuel impacted?
On December 31, 2015 Act 188, 2012 Session Laws of Hawaii repealed the two cents
per gallon of diesel oil and the two cents per gallon of aviation fuel to one cent per
gallon each. HDOT requests the restoration of both fuel fees back to two cents per
gallon.
When was the last time these fees were increased?
The last time the State fuel fee was increased was in 2007 (Act 209 SLH 2007). The
State motor vehicle registration (Act 162, SLH 20011) and the State motor vehicle
weight fees (Act 86, SLH 2011) were last increased in 2011.
How are federal funds involved?
The Federal-aid Highway Program, like many other grant programs, works on a
reimbursement basis. Therefore, when we ask the federal government for the okay to
start a project with federal money, they set aside or obligate the full amount of money
needed for the project. We cant bill the federal government until we have incurred
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eligible costse.g. paid the contractor or paid for staff labor or purchased materials.
For instance, if we have a 3-year project that is going to cost $3 million, we might only
expend $500,000 the first year, $2 million the second, and $500,000 the third. On this
single project, we would carry an unexpended balance, (or backlog as the media calls
it), every year, albeit decreasing, until the project is completed and we have been fully
reimbursed. Because we have many projects that are started and completed at various
times, we should always have some balance of obligated but unexpended federal
funding.
The Pipeline, aka unexpended federal balance, is the difference between what is
obligated for all projects and what we have expended and have been reimbursed for by
the federal government. Again, every state carries an unexpended balance because of
the reimbursement nature of the program and the time it takes to deliver projects.
I am still not clear on the pipeline funding, can you give me a comparison?
Pipeline funding is similar to a personal checking account. A person has money set
aside for rent, utilities and other recurring monthly expenses. You may have the money
in your checking account, but you dont pay the bill until it is due. While that money sits
in your account it is obligated, but you wouldnt call it a backlog. Similarly, HDOT has
money sitting in its account, but cannot pay its bills until the work is complete.
How much money does the Federal Government contribute and how much does
the State match?
In many cases the federal government will pay for 80 percent of certain projects, if the
State can match the remaining 20 percent. The additional revenue HDOT is asking for
will ensure we can match our share and not miss out on much needed federal dollars.
Hawaii residents pay their share of federal taxes like the rest of the nation. HDOT wants
to get that money back in order to make improvements, just like other states.
What impact is there on Electric Vehicles?
As of December 2015, there were 3,990 registered electric vehicles in Hawaii, an
increase of 26 percent from the prior year. Electric Vehicles use the roadways just like
gasoline powered vehicles and are expected to contribute to the operation and
maintenance of the highways system. Although electric vehicles dont pay gas fees,
they are generally heavier than comparable sized vehicles and pay a little more in
weight fees. Electric vehicles pay the same weight and registration fees as gasoline
powered cars.
Are there other benefits to adjusting the user fees?
The state fuel fee, the state motor vehicle registration, and the state motor vehicle
weight fee are the major revenue sources for the State Highway Fund. They are also
the major sources of pledged revenues for the Highway Revenue Bonds. The
additional revenue will positively impact the Highways Revenue Bond ratings. A higher
bond rating is important because it brings a lower cost of borrowing and saves money.
When does all this begin?
The requested start date is July 1, 2016, if approved by the State Legislature, although
the agencies that collect the fees may need some additional time to prepare the system.
How can my voice be heard?
Public testimony is welcome on this and every piece of legislation introduced at the
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State Capitol. The bill numbers for this subject are SB2938. You can monitor the
progress, submit testimony and view hearing dates on the Hawaii State Legislature
website which is www.capitol.hawaii.gov/