In this past legislative session, we were following bills sponsored by the state聽Department of Transportation to raise the charges on vehicle ownership 鈥斅specifically, the gasoline and vehicle weight taxes and vehicle registration fees, all of聽which pour money into the state highway fund that the DOT controls.
DOT pushed for聽the tax hikes and got one bill through the Senate, but it聽had to cross over to the聽House and died a fiery death in the House Transportation Committee with TV cameras聽rolling.
It鈥檚 very tough to get a tax increase through in an election year, especially in the聽House where every member is up for re-election.
But DOT鈥檚 reaction, as stated by聽Deputy Director for Highways Ed Sniffen in , was essentially that it聽would be shelving capacity improvement projects like additional lanes for Highway聽130 on the Big Island, Lahaina Bypass 1C to the Kaanapali Connector, Kahekili聽Highway widening, or anything on Kauai.
Those plans aren鈥檛 dead, but 鈥渁re just projects that聽we cannot move forward at this time because we cannot see funding available to fund聽these projects in the next 20 years,鈥 Sniffen said.
But permits, environmental assessments and the聽like for these projects have a shelf life, and a significant deferral means any progress聽made in clearing those hurdles may be nullified.
And then, what does DOT mean by 鈥渇unding available鈥? House Finance Committee Chair Sylvia聽Luke pointed out that the Legislature gave DOT an extra $37 million this year out of the聽general fund to make up the difference.
But Sniffen said that the projects could be freed聽up only if 鈥渨e can get a continuing addition to our funding.鈥 Apparently he is looking for聽some kind of earmarked tax before the chokehold on our highway capacity projects will聽be loosened.
Certainly, state agencies shouldn鈥檛 be going around signing contracts with money聽they don鈥檛 have. So our State Procurement Code before contracts are binding.
But the Code doesn鈥檛 require an聽earmarked tax before an agency can commit to a large project spanning multiple聽legislative sessions. Rather, the Code 聽only require that funds be available for the portion of the contract during the聽initial fiscal period, as long as the contract says that future payments are subject to聽future appropriations or special fund revenues.
Contractors dealing with the state are聽used to seeing such contract clauses and most won鈥檛 shy away from public works聽projects.
Is there any evidence that earmarked tax revenues are more stable or certain聽than general appropriations?聽Recent experience with the tobacco tax tells us that the聽reverse may be true, as we .
The tobacco tax was earmarked to聽fund the John A. Burns School of Medicine and its Cancer Center, but collections in that聽tax had recently turned south and weren鈥檛 helped by a 2015 law that raised the smoking聽age from 18 to 21. As a result, the Cancer Center wailed that its national designation聽was in jeopardy. (Somehow its designation survived.)
Certainly, an appropriation once聽given can be taken away, but the same is true of any tax, earmarked or otherwise.
The bottom line is that although big projects like highway capacity improvements聽require lots of money over many years, we don鈥檛 need to have the funding in the form of聽special fund tax increases as long as the state is committed.
What we do need is to聽move forward where we have already spent time and money in design, permitting, and聽planning so we avoid having to spend additional vast quantities of time and money to do聽those things over from the beginning.
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