The state will hold statewide public hearings on the proposed increases starting tomorrow at 8 a.m. at the Harbors Division office, 79 S. Nimitz Highway near Aloha Tower.

The state originally said fees may increase by as much as 45 percent across the board, including for wharfage, dockage and mooring. But the state now is talking about a lower percentage number, although no specifics have been given.

"It won't be as bad as people think," said Tom Fujikawa, state Harbors Division chief at the Department of Transportation. "It's not a hard and fast thing that affects everyone in the same way. I want to hear the testimony first. We may have to adjust for hardships."

The original proposed rate increases, the first since 1992, was in two parts: a general boost of about 20 percent and about 25 percent increase to meet a claim from the Office of Hawaiian Affairs related to ceded lands' income for Native Hawaiians. That claim is subject to a ruling by the state Supreme Court.

The state DOT portion is scheduled to take effect on March 1, Fujikawa said.

The state needs the rate increase to finance $38 million in bonds that will be used for harbor improvements. The two major projects are the expansion of Barbers Point harbor and the interisland terminal at Pier 40.

A 45 percent rate increase "could mean as much as $75,000 to $100,000 off our bottom line," said Jim Bannigan, president of Hawaii Metal Recycling, which operates out of Barbers Point harbor. The company is a large purchaser of old cars and other metals that are cut up and shipped out of state.

Bannigan said the only way his company can pay for this increase is to lower the price offered for scrap metal. If that happens, Bannigan said, he isn't certain whether people will bring in the scrap metal or just let it sit. "There could be a lot of car bodies sitting around the island," he said. "I think the increase is ill-advised at this time."

Large cargo carriers, such as Sea-Land Services and Matson Navigation Co., are expected to pass the cost along to consumers. Jeff Hull, Matson's public relations spokesman, said harbor fees traditionally have been passed on to consumers.

But small, tourist-related businesses say the fee increase will hurt them more.

"I can't pass this on," said Ed Boot, vice president and general manager of Voyager Submarines, which operates two submarines for tourists out of Kewalo Basin.

Voyager is a locally owned company that started two years ago and this year increased its employees from 50 to 94.

While Boot said business has been growing, the company still is not making big money because it must pay back $12 million used to start the business.

"I understand that they are trying to catch up (with state expenses)," Boot said, "but this kind of an increase really hurts a business just starting out." He said the company already pays more than $100,000 a year in fees to the state.

But Fujikawa said that Hawaii harbor fees are much lower than cities on the West Coast.

A preliminary report from SMS Research shows that harbor fees in cities such as Los Angeles, San Diego and Seattle "average two and a half times" more than those in Hawaii, he said.