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Gas Prices May Spike After Tax Break Expires

Drivers Oppose Measure To Raise Gas Prices

POSTED: 9:11 pm HST February 10, 2009
UPDATED: 9:38 pm HST February 10, 2009

If the Lingle administration gets its way, Hawaii drivers will have to pay about 10 cents more per gallon of gas starting July 1 because of a push by the administration and some lawmakers to end an ethanol tax break Hawaii drivers have enjoyed at the pump for past two years.

The excise tax break was given to Hawaii drivers when the state required more expensive ethanol to be blended into gas at the pump.

That tax break is scheduled to expire June 30 which means gas prices will increase anywhere from 8 to 12 cents a gallon.

"Oh no, no, we pay enough for gas already too much for gas. So no, I think that's terrible," said driver Cindy Leimer.

The ethanol tax break had brought Hawaii $40 million in tax relief each year which the Lingle administration wants to help balance the budget.

"We need the money to provide essential services to people who need help from the government to keep the economy going. We need the money to try to preserve jobs," said State Tax Director Kurt Kawafuchi.

Drivers and gas station owners said such a tax hike would come at a terrible time.

"We have so many people who have lost their jobs or had hours cut back where I work we have cut pay 10 percent," said Barney Robinson, a gas station owner.

"We are looking at taxes and fees going up all over the place now on top of that we are going to have some gasoline tax increases," said Sen. Rosalyn Baker, Consumer Protection Chairwoman.

Baker said they will fight to extend the ethanol excise tax break for drivers indefinitely.

"I just don't think our citizens can afford adding an additional tax onto their fuel at this time," Baker said.

Baker will hold a hearing on her bill Thursday to extend the ethanol tax break to drivers indefinitely.
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