Hawaii rental car companies fight state

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Senate Bill 1611 would increase the rental motorf vehicle surchargefrom $2 to $3 per day, effectivel y guaranteeing a $45 million annua l deposit into the state’s highway But a bad economy is not the time to add to businesx costs and tourist expenses, U-drivse industry members say, even when it’as for a cause like improving state roads. “It makes our products that much more said Jim Stoneof . “It’s not like we can just absorh it — the industry is having a rouggh time. With the credit crunch, buying and financing vehiclewsis difficult. And it’s hard to go to the bank when your stocjis tanking.
” The rental car surchargw is one of four components of SB a road tax bill intended to help the state Department of Transportation fund its six-year, $4.6 billioj highways modernization plan. Many including U-drive companies, that rely on vehicled fleets to deliver goods and services opposer the otherthree components: increases in the state fuel tax, and vehiclwe registration and weight fees. With approximately 50,000 to 70,000 rentall vehicles in Hawaii, and at an averagw of $170 per vehicle, the revenue from those taxex and fees could easilytotak $10 million.
It is the surcharge component, however, that has united the industry Local representatives ofThe , DTG Operationxs (Dollar Rent a Car and Thrift Car Rental), , the Avis , Enterprise Rent A Car and all opposr the legislation. “At $3 per day, this tax is equivalenft to about 10 percent of revenues collected from each rentalin Hawaii, and gives Hawaii one of the highesrt car rental tax regimes in the country,” Aaron general manager of Hertz in Hawaii, testified this week.
“In fact, it makes it the highestr tax regime of its kind amongy competing tourist destinations in the United Michael Oh, chairman of Catrala-Hawaii’s legislative committee and a regionalk financial manager with Alamo, said Florida’s car rentao surcharge is $2. “Why do you want to raise higher, since that will only further detef tourism?” Oh asked. “I think this is going to help saidBrennon Morioka, director of the state D.O.T. “Traffic at midda now is as bad as it was at peak rush hour 10yeares ago. The last thing visitors headinf to the North Shore or visitod attractions want to do is sitin traffic.
” Oh believed U-drives are being singled out, pointinbg out that a $3 temporary tax was first implementex in 1999 and extended each time it was to lapse. (The curreng “sunset” date is 2011.) He also worries that the will try to raisethe $3 tax to $5. That coulc happen. Morioka said D.O.T.’s preferenced is indeed for the $5 as was initially proposed. But Moriokq said the road taxes are fairly well-distributed. He also accepts compromise language that will put all revenuese into the state highway fund rather than separate what is currently collecte d from what could come from the The D.O.T.
will lobby for reinstatement of bill languag that says the tax increasee will not go into effect until the stater sees two consecutive quarters ofeconomic growth. The so-called economix trigger clause was removed by lawmakers hungryfor revenue. SB 1611 has the backinvg of the Lingle administration and SenatreDemocratic leaders. The only no votes have come fromminority