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Invisible Cost Could Go Higher

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By Lowell L. Kalapa

Last week we examined the appropriate relationship between a user tax or fee and the programs or services for which they are collected.
In the area of transportation, it was noted that in many cases there is a direct relationship between the fee or tax charged and the beneficiaries. In the case of highways, the highway user fee and taxes like the fuel and weight tax and the vehicle registration fee match the use of the roads with the cost of the repairs they will need. That is fine and dandy if lawmakers would keep their sticky fingers out of the pot.
As we have learned, over the past eight years state lawmakers have raided the state highway fund to the tune of more than $150 million. Those highway user paid dollars went to fund general fund programs like education, prisons, and state parks. Meanwhile state highways have fallen into disrepair and new construction has been delayed. This is certainly not what Hawaii drivers dutifully paid high gas prices and larger and larger annual vehicle registration fees for over the past eight years that the highway fund has been raided.
Another looming issue of the appropriateness of a fee or charge is the wharfage and docking fees currently paid by all ships which pull into Hawaii’s harbors. Currently, those ships pay the same fee schedule prescribed for the type of ship and usage and length of usage and ships generally have access to any and every wharf or dock in the state harbor system.
However, with the advent of regular passenger cruise ship activity, advocates are calling for docks and terminals that would be designed exclusively for this use. The same argument will probably be made for the proposed interisland super ferry as it would need a staging area and ramps to accommodate motor vehicles using the ferry to go from island to island.
Since the docks and terminals would be located within the state harbors, the assumption is that they would be paid for out of the wharfage and docking revenues. The problem with this is that the current fee structure barely covers the needed repairs and maintenance of what is there now. Thus, it would appear that wharfage and docking rates would have to be increased.
One has to ask whether or not this is fair in that if these terminals are for the exclusive use of passenger cruise ships or for the interisland ferry, should other users of the state’s harbors be asked to pay for these facilities which they cannot use? For example, a ship bringing cargo into the state would not be able to unload its cargo at a passenger terminal because the facility would be specifically designed for a passenger cruise ship. Yet if the wharfage and docking fees are increased across the board, the cost of constructing that passenger terminal would be passed on to all users of the state harbors.
Why should this matter to you the taxpayer? Remember that nearly everything we consume comes through the portals of the state harbors. An increase in docking and wharfage fees will be passed along to all consumers in the price of a bag of rice or a roll of toilet paper. Thus, unless residents embark or disembark from a passenger ship in any one of the state harbors, there is no user-beneficiary relationship.
Prices of all commodities brought into the state through the state harbors will have to be increased, but instead of being acknowledged that it is an increase in the wharfage and docking fees, the blame will be placed on the retailer or the developer of the house built with materials that arrive on the state’s docks.
A more accountable alternative is to impose a fee unique to passenger cruise ship passengers that would be included in the price of the cruise. Such a fee would have a direct relationship to the benefits enjoyed by the passenger getting on or off the cruise ship at these dedicated terminal facilities. The amount of the fee could be easily calculated based on the projected cost of building and maintaining the facilities and a separate fund could be established to insure that the revenues from the dedicated fee are used exclusively for the passenger cruise ship facilities.
To use the current system of docking and wharfage fees to build a facility that will only benefit passenger cruise ships not only violates the accountability relationship, but shifts the burden of the fee to taxpayers who may never use that facility.

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