Hawaii DOT to test mileage user fee to supply highway fund, replace fuel tax

Updated Sep 20, 2016
Hawaii’s scenic H-3 highway.Hawaii’s scenic H-3 highway.

The Hawaii Department of Transportation’s (HDOT) Highways Division plans to test a mileage-based user fee to provide revenue for the State Highway Fund and a possible replacement to the fuel tax, which accounts for 33 percent of the fund.

The agency received a nearly $4 million grant from the Federal Highway Administration as part of the Surface Transportation System Funding Alternatives grants being used to investigate alternate revenue streams for funding highway programs. HDOT’s plan is one of eight state DOT projects receiving the grants.

According to the proposal, HDOT says it is partnering with four counties in the pilot project, including Kauai, Honolulu (city and county), Maui and Hawaii. The plan spans three years, is broken up into six phases and will be based on an existing program that collects odometer readings each year.

“Our proposed project involves setup and implementation of an accounting system to provide prototypical invoices (or “billings”) for mileage driven and other direct communications about revenue alternatives to over 1 million motorists,” HDOT says in the proposal. “Billings will feature personalized information about motorists’ road use and corresponding road usage charge, gas taxes paid, and other fees.”

HDOT plans to begin demonstrations in the first half of next year with manual reporting and with plans for “continuous feedback” from motorists for an 18-month period.

The six phases of the proposal include:

  • Phase 1: Policy Design
  • Phase 2: Manual Reporting Test Setup
  • Phase 3: Manual Reporting & Evaluation
  • Phase 4: Automated Reporting Setup
  • Phase 5: Automated Reporting & Evaluation
  • Phase 6: Report to Policy Makers

Details of the proposal are available here.