In order to raise money to fix roads, the Brown County Council voted to increase local vehicle taxes starting Jan. 1. But they won’t be going up by as much as originally proposed.
A rate evaluation committee was concerned that going to the maximum rates allowed by the Indiana General Assembly would place too much burden on the county’s poorest residents, said county council member David Critser, a member of the committee.
Under the rates the council approved June 20, the minimum to be paid on older vehicles will increase by $7.50 per year. The tax on trailers under 9,000 pounds will go up by $20 and on trailers over 9,000 pounds by $30.
A resident with an old pickup and small trailer who would have paid an additional $107.50 under the original proposal will pay an additional $27.50 instead.
The approved rates are estimated to raise $502,141.75 in new revenue in 2017, said County Auditor Beth Mulry, a member of the rate committee.
The county won’t be the only beneficiary of the increase. Nashville government also stands to receive an additional $13,403.25.
Under the original proposal, paying the minimum tax on older passenger vehicles — generally, seven years old or older — would have meant an $42.50 increase in 2017, and all sizes of trailers would have cost an additional $65 to register or renew.
That would have raised $833,838.05 in new revenue for the county.
The new revenue will be used for an Indiana Department of Transportation matching grant, council President David Redding said. The new program promises up to $1 million a year from the state for road maintenance and repair.However, the award of a grant is not guaranteed.
Last year, the county spent $2.4 million on fixing 23 miles of roads.
Brown County Highway Superintendent Mike Magner said 70.8 miles needed to be repaved last year, which would have cost $11.2 million.
And even if the county had enough to repave the other 48 miles last year, an additional 42 miles would need to be redone this year, he said.
Magner estimated that an additional $1 million, such as from the INDOT grant, could pave another 10 to 12 miles at current material prices.
If it gets a grant, the county must match the state’s money from one of three sources: an increase in local vehicle tax rates, periodic and unpredictable local income tax special distributions, or the county’s rainy-day fund.
Currently, the county has about $800,000 available as possible match money, from a local income tax special distribution it received in May.
League of Women Voters President Julie Winn asked the council how they would raise a $1 million grant match in future years without raising the local vehicle taxes to the maximum.
Mulry responded with an analogy to a buy-one-get-one offer at a store: If you only have enough money to buy half the items you want, you only buy what you can afford. So if the county doesn’t have $1 mil- lion to match with state grant money during the next grant cycle, it can still apply for a smaller grant, she said.
Critser said the county will have money in the rainy-day fund that can be tapped for matching grant funds.
The General Assembly is allowing the county to collect about $1 million in additional property taxes between 2016 and 2017 to replace revenue the county did not get for the bridge fund in 2013 and 2014. That was due to errors during the budget process those years.
The county made up the lost bridge funding by dipping into the rainy-day fund, so it can replace that money from the additional tax collections.
Local vehicle taxes are paid in addition to plate fees and state excise tax when a vehicle is registered or renewed.There are two categories of local vehicle tax: surtax and wheel tax.
Surtax applies to passenger vehicles — from mopeds to minivans — and trucks under 11,000 pounds.
Wheel tax applies to vehicles over 11,000 pounds, such as large trucks, buses and industrial and farm equipment. Wheel tax also applies to all trailers but is not charged for church buses or vehicles registered to municipalities or schools.
In 2016, county residents paid a local surtax of 10 per- cent of the state excise tax, or $7.50 minimum. The state excise tax ranges from $12 to $532, depending on vehicle age and original value.
Mopeds were assessed a flat $10 tax.
On June 6, the council proposed a flat $50 surtax regardless of vehicle age or value. On June 20, a rate evaluation committee suggested doubling the current rate instead, to 20 percent of state excise tax with a $15 minimum, which the council passed.
The county wheel tax was assessed at various rates in 2016, from $15 for trailers to $40 for trucks over 26,000 pounds.
The council had proposed a flat $80 wheel tax, whether applied to a boat trailer or a cement truck.
The evaluation committee suggested a $35 rate for trailers 9,000 pounds or lighter, and a $45 rate for trailers over 9,000 pounds, but an $80 wheel tax for all other affected vehicles. That’s what the council approved.
Read/download the final local vehicle tax ordinance:
Read the new ordinance and see a chart with current and new vehicle tax rates, organized by type of vehicle, at bcdemocrat.com.