Wheel tax and surtax increases headed for June 20 vote

The Brown County Council is on its way to raising the wheel tax and surtax in an attempt to gain more money for road work.

The council had a first reading of the new ordinance June 1. It’ll have a second reading and vote Monday, June 20.

The council had originally been presented with an ordinance that did not take all vehicle classes to the new limits allowed by the state.

However, the final ordinance that was read in the meeting did take them to the max.

As it reads now, the ordinance would impose a $50 local surtax on all vehicles under 11,000 pounds, including motorcycles and mopeds.

It would also place an $80 wheel tax per registration on trucks and other vehicles over 11,000 pounds, such as recreational vehicles industrial or farm equipment, in addition to all sizes of trailers.

The current county surtax is 10 percent of the state excise tax, but no less than $7.50. The current wheel tax varies from $15 to $40 based on vehicle class.

Church buses and municipal vehicles are exempt from the current tax and would be exempt from the new tax.

However, the council also appointed a five-member committee to review the new tax rates and make recommendations for lowering them before the June 20 meeting.

Originally, the tax increase was proposed to generate revenue for a matching grant from the Indiana Department of Transportation.

The new grant program allows counties, cities and towns to apply for up to $1 million for projects annually. However, the municipality must match grant money dollar for dollar from local funds.

The law that raised the limits on local vehicle taxes and created the grant program required that the local funds come from one of three sources: special distributions of local income tax revenue by the state, an increase to local wheel tax and surtax rates, or the municipality’s rainy day fund.

However, due to a proposed change that will be discussed during the next session of the General Assembly, the Indiana State Board of Accounts has now told local governments that they can use any locally-generated revenue that is able to be spent on roads and bridges to come up with the matching money for the grant, said Brown County Auditor Beth Mulry.

If the new rule does not pass during the next session, municipalities will be restricted to the three stated revenue sources in future years, but will not be penalized for using other revenue sources in the current fiscal year, Mulry said.

County council President Dave Redding advocated that the council consider future years as well, and not just how to come up with $1 million for this year.

He wants the council and commissioners to look at using the $2 million road loan the county took out in January as a way to match the grant money this year, saving the more than $600,000 the county received as a special income tax distribution for following years.

Redding said he would prefer to not raise the local vehicle taxes if the grant matching funds could come from other sources.