Hawaii moves toward road usage charge and a clean energy future

By Saumya Jain

With continuously declining fuel tax revenues and growing interest in sustainable modes of transportation, many states have initiated conversations around vehicle miles traveled fees. Hawaii has addressed this topic more aggressively than many others. A decade ago, Hawaii set an ambitious goal to reduce its dependence on oil and create a clean energy future by 2045. About $83 million of the $275 million revenue for its highway fund comes from fuel taxes each year. According to HDOT, this share started declining in 2017.

To compensate for the declining revenue source and consciously prepare for 2045, Hawaii is set to launch its VMT demonstration project this fall. Through this project, individual motorists would receive an annual report based on how much they drove between safety inspections. The report would tell them how much they paid in fuel tax and how much they could pay under the proposed system. Following the demonstration project, the DOT plans to start a volunteer pilot program involving 2000 motorists. Miles driven would either be tracked by an electronic device similar to what Oregon’s pilot program used or through annual safety checks.

There were a few concerns raised at the public meetings about implementation and cost efficiency, but DOT officials are quite certain that the change would result in a more equitable road usage system.

Figure 1 Gas tax by vehicle type vs road usage charge by vehicle type ©2017 WSP USA

A VMT system is a logical intervention as Hawaii moves toward its goal of an all-electric vehicle fleet, and a mileage-based fee carries a strong price signal for all drivers. This is important, because the state still needs measures to curb how much Hawaiians drive. In a study by SSTI and Smart Growth America we found that without cutting VMT, the energy grid would need to produce one-third more energy that it does today. The study suggests that if Hawaii pairs EVs with compact mixed-use development and better non-auto travel modes, thereby reducing the projected VMT by 20 percent, the 2045 clean energy future would become more realistic.

Saumya Jain is a Senior Associate at SSTI.