HONOLULU, Hawaiʻi — As working families across Hawaiʻi continue to grapple with the nation’s highest cost of living and an ongoing mobility crisis, Hawaiʻi Appleseed Center for Law & Economic Justice has released an important new report, “Funding Free Transit: Cost Estimates and Revenue Options for Universal Fare-Free Bus Transit in Hawaiʻi.”
Authored by Transportation Equity Policy Analyst Malia Boksanski, the report provides the first comprehensive estimate of what it would cost to make bus transit free for every resident across all four counties, and outlines practical funding mechanisms to make it a reality.
The report estimates that a statewide universal fare-free bus program would cost approximately $62.4 million annually in the near term. This figure accounts for the cost of replacing lost fare revenue and anticipated ridership growth.
At the same time, the report concludes that sustained investment in transit infrastructure generates an estimated $5 billion in GDP for every $1 billion in annual investment over 20 years.
“Public transit connects people to opportunity: to jobs, school, medical care, and daily life,” said Boksanski. “Right now, our fare structures are a patchwork that leaves residents paying wildly different prices depending on which island they live on. By removing the cost of a fare, we can directly expand who can get where they need to go.”
The report highlights that fare revenue covers only a small fraction of what it costs to run Hawaiʻi’s bus systems. On Oʻahu, for example, fares cover roughly 15 percent of TheBus’s operating costs, with the remaining 85 percent already funded through public revenue regardless of what riders pay.
Eliminating fares would also eliminate the significant administrative overhead required to collect them, manage passes, and verify eligibility, lowering the net cost.
Currently, Hawaiʻi’s transit landscape is deeply inequitable. While Hawaiʻi Island’s Hele-On system has been fare-free for all riders since 2022—resulting in ridership that now exceeds pre-pandemic levels—other counties rely on a complicated web of reduced fares and targeted exemptions. Under the current system, keiki on Oʻahu pay to ride while keiki on Maui ride free, and low-income workers on Kauaʻi pay full fare while their counterparts on Maui do not.
“Where you live should not determine whether you can afford to get around,” said Hawaiʻi Appleseed Executive Director Will White, echoing the report. “A statewide universal program would end these disparities once and for all.”
The report outlines a path forward for the Legislature, recommending that the state enact permanent, universal fare-free bus transit with no pass, enrollment, or means-testing. To fund the program, Hawaiʻi Appleseed identifies three primary revenue options:
The Barrel Tax: Reallocating a portion of the existing $1.05 per-barrel tax on petroleum.
The Clean Fuel Standard (CFS): Utilizing revenue generated from the state's emerging clean fuel credit system.
The State Highway Fund: Redirecting a share of existing highway revenue, such as the rental motor vehicle surcharge tax, to fund transit.
The report recommends distributing these funds to counties via a formula-based grant tied to population, ridership, and need, rather than a flat reimbursement. It also urges the state to require annual public reporting from transit agencies and to invest in service improvements alongside fare elimination to accommodate the anticipated surge in ridership.
“Making transit free for everyone isn’t just a social good—it’s a massive economic and climate win,” said Boksanski. “A single transit trip costs a fraction of what a vehicle trip costs.”
To read the full report, please visit hiappleseed.org/publications/funding-free-transit.
