The Brown County Council will have a final reading on an ordinance to lower taxes on large vehicles next month after following through on a promise to reduce them if they no longer were needed.
Under the ordinance, which could take effect Jan. 1 next year, county wheel taxes would decrease by $20 for buses, farm semitractors, farm semitrailers, farm trucks, recovery vehicles, recreational vehicles, semitractors, semitrailers and special machines.
The wheel tax raise approved in 2016 for 2017 increased those taxes to $80, and they will be reduced to $60 if the council approves the ordinance on second reading at its Aug. 21 meeting.
The tax is still higher when compared to taxes in 2016, when a farm semitrailer cost $25 to renew, for example.
Trailers were reduced by $10 under the new ordinance, Brown County Auditor Beth Mulry said.
The excise tax will also decrease under the ordinance from 20 percent to 16.5 percent. But the minimum to be paid on older vehicles will remain at $15. It was doubled in 2016.
The excise surtax rate applies to all motorcycles and vehicles under 11,000 pounds, including mopeds.
Mulry estimated that the cuts would equal about $186,000 put back in taxpayer pockets.
The revenue brought in from the increase was to be used for the Indiana Department of Transportation Community Crossings matching grant — a program started by the state legislature in 2015 to help with local road funding shortfalls.
The main purpose of the funding is for road paving or bridge construction.
Brown County won the $1 million Community Crossings road grant last fall and put up $1 million more in match money by increasing county wheel tax rates, dipping into its rainy-day fund and using a special distribution of tax dollars from the state.
That $2 million was almost enough to repave all of Salt Creek Road, Sweetwater Trail, T.C. Steele Road and the paved part of Crooked Creek Road this year. Other work is being funded by a road loan and the county’s motor vehicle highway fund, which comes from gas taxes and license and registration fees.
It was announced this year that INDOT was lowering the match requirement for smaller communities to a 25 percent match.
“If … the state says ‘We’re only asking for 25 percent of that now,’ without taking some reaction as a reduction to the taxpayer would look pretty bad and actually, in fairness, would be a pretty bad thing to do. I think some reaction is necessary,” council member John Price said in a June 5 council meeting.
Brown County Highway Superintendent Mike Magner submitted the Community Crossings grant application this month, which could be approved this year then spent in 2018 on road construction.
“That meant I could only submit for $1.3 million instead of $2 million,” he said of the match changes.
“We’re only submitting for a little over 11 miles of road for round two versus 21 miles of road that we’re getting to pave right now. We’re going to see the reduction of miles and paved through that program with the match money.”
The county will have to put in $333,333.33 as match money.
The chosen projects for 2018 are Bellsville Pike Road from State Road 135 South at Stone Head to the Bartholomew County line and Helmsburg Road from Nashville town limit to State Road 45 in Helmsburg, Magner said.
Each section is about 5.75 miles for a total of 11.5 miles, he said.
Magner cautioned the board about decreasing the tax because of INDOT changing the match requirements because they could change again next year requiring them to find more money for the match.
“The biggest unknown is what are they going to do next year? They may be right back next year to the 50 for 50, dollar per dollar match,” he said during the July 17 meeting.
“In which case we may be coming back asking for additional funds again, to put the wheel tax back up, so just as long as you’re willing to entertain that.”
The highway department and county commissioners’ goal when they first started applying for the Community Crossings grant in 2015 was to pave 20 miles of road per year beginning in 2016 and going until 2020, Magner and Commissioner Diana Biddle said.
This would cost approximately $2 million a year.
“That commitment isn’t going to change,” Biddle said.
“I am going to have to come up with $186,000 from another source because you just cut that out of $2 million that Mike (Magner) and I have been using to try to pave 20 miles of road a year.”
Council president Dave Critser said the county still receives a $2 million road loan, so cutting taxes shouldn’t affect plans.
“The hope was this wheel tax would generate enough revenue that we would not not have to do a $2 million road loan,” Biddle said during the June 5 county council meeting.
The county projected the surtax increase bringing in around $400,000, and Critser said that cutting $186,000 won’t negatively affect the paving plans.
Mulry said in a June 19 county council meeting that the surtax brought in around $275,000 in 2016.
“That was concerning to me in that if we cut this and that trend continues we’re going to be less than the $400,000 we estimated originally,” she said.
Both Magner and Biddle cautioned against that projection because the tax hasn’t been through a full cycle since some people register their vehicles for two years instead of one.
“(Spending) $20 on a car registration is much less than what a property tax owner is probably paying back on that $2 million road loan each year,” she said.
Council member Darren Byrd said his biggest concern with decreasing the tax is if the state decides to change the funding formula again next.
“We were forced to raise this for a reason because we had to come up with the new money to get the match money,” he said.
“We said we’d roll it back if it wasn’t needed, but we still don’t know if it is going to be needed or not.”
Critser said that it is difficult to determine what the state agencies will do.
“If you start trying to run Brown County government thinking about what the state going is going to do, you’re going to be chasing your tail. You do what you have to do and go from there,” he said.
Critser called the tax decrease a “readjustment” rather than a reduction “because we thought they (the state) were out of line.”
The Indiana legislature passed House Bill 1002 last General Assembly, which established a 10-cent-per-gallon increase in gas tax for 2017. That money would provide more funding for roads, too, Critser said.
“We’re only asking $186,000 to give back to our taxpayers,” he said.
House Bill 1002 also implemented a statewide $15 BMV registration fee for all vehicles less than 26,000 pounds. That money would go into a fund for Community Crossing funding.
“We’re not going to get all of that at a 100 percent level this year because there were people last year that bought two year plates. It’s going to take probably two years to know actual, true numbers of what’s coming in,” Biddle said of the new fee.
Paving 20 miles a year is what the county needs to maintain the 200 miles of paved roads here, Magner said.
“If we’re not targeting that then we’re going to start falling behind again,” he said.
“We just want to keep moving forward. Prices won’t get any cheaper, so we’ll do it now, get as many paved as we can so we can maintain those roads before they fall through and we have to pay to recondition them.”
About 65 of the county’s 200 miles of paved roads could get repaved this year.
Roads on that list included: Valley Branch, Plum Creek, Raspberry Lane, Sherwood Forest Drive, Peoga Road, Oak Ridge, Carmel Ridge, Bellsville Pike, Helmsburg Road, Greasy Creek, Christianburg Road and Grandview Road.
Magner said that the cost to recondition a road jumps from $100,000 a mile for paving to $500,000 for full base repairs.
“I would say there’s a 99 per-cent chance they’ll (INDOT) change the percentage again for match money, so we just don’t know what it will be, so it makes it hard to plan ahead,” Magner said.
“We’ll come up with the money one way or another,” Critser said.
The Brown County Council will have a second reading on an ordinance that would decrease the wheel tax and excise surtax for large vehicles in the county beginning in 2018. The meeting is at 6:30 p.m. Aug. 21 at the County Office Building in the Salmon Room. The vehicle taxes were increased in 2016 to generate new money for the Community Crossing road funding matching grant from the Indiana Department of Transportation.
The decrease would take effect in 2018 if approved.
Here is how the decreases would affect local taxpayers and vehicle owners:
Bus (private owner); farm semitrailers; farm semitractors; farm trucks; recovery vehicles; RVs; semitractors; semitrailers; special machines; trucks 11,000 pounds or more; truck campers
Trailers less than or equal to 9,000 pounds
Trailers more than 9,000 pounds
The town of Nashville has applied to receive funding from the Community Crossings grant program.
Nashville Town Utility Coordinator Sean Cassiday said that the town is able to put up $82,000 in match money for the grant. The funding would come from the fees collected from the BMV, gas and wheel taxes.
Community Crossings requires smaller communities to put up at a 25 percent match. Previously it was a dollar for dollar match.
Using the funding, the town hopes to microseal six different streets:
- Locust Lane, from Main to Mound streets
- Jefferson Street, from Gould to Mound streets
- Jefferson Street, from State Road 135 to Mound Street
- Frankling Street, from Jefferson to the east, passing Old School Way
- Deer Lane
- Dogwood Drive
The town also plans to use funding to add a turning lane to the entrance of Hawthorne Drive as well as a possible third lane back to the Nashville Police Department, Cassiday said.