Hoosier cities and towns have a brief window to adopt a countywide wheel tax and vehicle surcharge without approval of their county councils.
That’s included in the state’s two-year, $30 billion budget that Gov. Mike Pence signed into law last week. It’s aimed at offering communities a means of raising more money to finance road and street repairs.
The wheel tax could range from $5 to $40 per vehicle.
Based on 2008 vehicle registrations, the minimum tax would generate $344,699.50 in Jackson County. The maximum rate would raise $1.37 million.
Jackson County has no wheel tax, and there does not appear to be a groundswell among local officials to adopt one this summer, although some officials are open to exploring the possibility.
In the past, county councils across Indiana were the only fiscal bodies with the ability to implement the tax.
David Bottorff, executive director of the Association of Indiana Counties, said it’s clear lawmakers want to give communities the option of implementing a wheel and surcharge tax to help pay for streets.
“What I think is happening is there are a lot of cities and towns saying, ‘Hey, we need more money for roads,’” Bottorff said.
And because some county councils are reluctant to implement the tax, city and town councils want to be able to enact it themselves, he added.
Cities and towns now can adopt the tax through the county option income tax council, which is composed of a county’s fiscal bodies, with a simple majority. In Jackson County’s case, the fiscal bodies would be the county council, Seymour City Council and the town councils of Brownstown, Crothersville and Medora.
Bottorff said the income tax council is required by state statute, but they don’t have any function in counties that have adopted the adjusted gross income tax, such as Jackson County.
For example, Bottorff said, if the Seymour City Council voted to adopt the tax, the county auditor would be notified and then would inform the other fiscal bodies of its decision. Each then could vote on the issue or table it, but if a simple majority voted in favor of a tax, everyone in the county would have to pay it.
Only the county council has authority to adopt the tax alone. None of Jackson County’s municipalities has enough votes on the income tax board to enact the tax alone.
Control of rates would rest with the income tax council if enacted that way. If the county council adopts the tax, it would control the rates.
The new option appears to be moot, however.
Seymour Mayor Craig Luedeman said he is not in favor of a wheel tax and only one county council member has an interest in at least exploring the tax further. Brownstown, Crothersville and Medora together would not have enough votes on the tax council together to adopt the tax.
“I haven’t polled the city council, but I don’t think they would be in favor of it, considering the council makeup,” Luedeman said.
He said enacting a wheel tax seems to penalize those governments that have been conservative about spending taxpayer money.
County Council member Brian Thompson agreed.
“Everything I’ve heard from taxpayers is that they want us to do more with the money we have,” he said.
But Jim Rebber, city council president, said Thursday that he has not had enough time to look at the issue in depth.
“It will be something we need to study and talk about it,” he said.
Brownstown Town Council President John Nolting also said he was not familiar enough with changes in the law to make a decision without looking at the issue.
“It’s also something that I would need to talk about with the rest of the council,” Nolting said.
Several years ago, the Jackson County Council rejected the idea of a wheel tax when proposed by then-council member Debbie Hackman.
“I just don’t think there was or is much support for it,” Thompson said.
However, at least one County Council member would like to see the issue explored further before dismissing it.
“I’m in favor of investigating it,” Greg Prange said. “I feel like I may be a lonesome soldier in this battle, just the same as Debbie was a couple of regimes ago.”
Prange said county highway superintendent Warren Martin and workers with that department do a wonderful job of maintaining county roads, but he would like to see them have more to work with if possible.
“I don’t want our county roads falling apart because of a lack of funds,” Prange said. “I’m worried about the infrastructure of the county. I’m worried about the infrastructure in the city.”
If a county wants to collect wheel tax money in 2014, the tax must be enacted before July 1 of this year.