Decatur County Council votes to adopt wheel tax, surtax increases

Following a public hearing, the six council members in attendance, President Ernie Gauck, Kenneth Owens, Danny Peters, Geneva Hunt, Bill Metz, and Larry Meyer voted unanimously to adopt an ordinance that increases the county’s surtax from $20 to $50 per vehicle on passenger cars, lightweight trucks, motorcycles, and other vehicles weighing less than $11,000 pounds. It also ups the wheel tax, a vehicle registration fee, by 30 percent.

The changes take effect Jan. 1, 2017.

The effort comes in response to a matching grant program offered by the state that could see Decatur County receive up to $1 million in state funding on certain projects if the local body can raise the same. The deadline to submit an application was July 15, but was extended to July 29, the Indiana Department of Transportation (INDOT) announced Wednesday. The deadline extension was put in place due to “high interest” in the program, INDOT officials said.

Called the “Community Crossings Matching Grant,” the program offers approximately $190 million in funding for road or bridge repair to communities statewide. It originates from legislation passed by the Indiana General Assembly in March and is facilitated by INDOT.

The funding possibility comes alongside a one-time redistribution of tax funds previously held in escrow to counties and municipalities. Decatur County received $667,000 in May to be used for road repair due to that legislation and intends to use it as part of the matching program.

The program, however, is a bit strict in the types of funds that can be used for the grant. Counties and cities have the option of using the tax redistribution funds, dipping into their “Rainy Day” (reserve) funds, or increasing the wheel tax and/or surtax.

An asset management plan is also required, with which Decatur County has already complied.

Decatur County Highway Superintendent Mark Mohr and Assistant Superintendent Tim Ortman have lobbied the council in recent months to push for the increase in the wheel tax and surtax in light of increasing costs associated with road and bridge repair – and the overall necessity of the work.

Gauck said the council would have chosen options other than a tax increase had they been available, but with time running short and road funding a lingering issue, the council needed to act.

“If there was a way that we could get these tax dollars from the state without raising any local taxes, this council would sure be in favor of that,” the Republican council president said. “I think our hands are tied on this if we want to obtain some of this money the state’s making available to us. That’s the reason we’re looking at these increases in taxes.”

Reluctant though they may have been, the council’s decision, for all intents and purposes, was reached after much discussion among county officials and state experts during last month’s meeting. Tuesday’s required public hearing, however, gave citizens a chance to respond prior to the ordinance’s formal adoption.

The longtime council president told the small crowd of county and city officials and local residents that the board was still open to hearing new ideas on the matter.

One government finance expert in attendance offered several.

Gail Snyder, a Democratic candidate for County Council who previously worked as a field agent for the Department of Local Government Finance (DLGF), said the council had other options available, and she urged the group not to enact flat rates that might be seen as unfair by some taxpayers.

“You’re talking about charging a person with a $500 car the same amount as if you drive a $50,000 car,” Snyder said.

Snyder called the county’s proposal “unfair and inequitable.”

Gauck countered that the vehicles do the same amount of damage to roads regardless of their cost, and that the only way to be completely fair would be to weigh each and every vehicle, a process he called “impractical.”

In lieu of the council’s flat rate proposal, Snyder suggested maxing out the wheel tax on the heaviest of vehicles, i.e. semis and trailers, and increasing the surtax by 20 percent. The measure, she said, would likely raise more money for the county in the future and would increase taxes on vehicles that do more damage to roads.

“That way everybody is paying their fair share,” Snyder said.

Snyder, who has worked in local government finance for more than three decades, also suggested using money from the Rainy Day fund, though Gauck said that money is already slated for other uses. The council had about $930,000 in that fund at the time of Tuesday’s meeting.

“Believe me, if we can find a way to do this without raising taxes, we’re gonna do it,” Gauck commented. The council president added that semis pay a fuel tax in addition to the wheel tax.

“The heavy trucks get hit pretty good on that,” he remarked.

Snyder stated she is in favor of road funding – and efforts to obtain it – and said her candidacy for the council had no bearing on her appearance at Tuesday’s hearing; she would have attended regardless of her political aspirations.

She warned that a source at INDOT had told her that the number of application could outpace the state’s available funds for the project and she encouraged the council not to “jump the gun” and enact an ordinance that she believes could unfairly burden taxpayers.

“It’s such an increase,” Snyder said. “There’s still time to change this. There’s time to make it fair and equitable and I would recommend you do that, and I hope you would consider that. I just can’t imagine that most people think this is the best and fairest way.”

Gauck reiterated that the county intended to be fair to all involved in the matter. He added that the issue could be reexamined next year and changed if necessary.

“I don’t think the council’s ‘dyed in the wool’ on this,” Gauck said. “Nothing says that next year we can’t re-discuss this and make adjustments.”

Councilman Owens expressed a similar sentiment.

“With the situation the way it is, we hate to pass [the increases], but you’ve gotta have roads and bridges to travel on, to go to and from,” Owens said. “If we can make some changes next year, we’ll do it.”

Greensburg Mayor Dan Manus also appeared at Tuesday’s hearing, following an appearance last month during which he pointed out the disparity in taxes paid by city residents versus how much the municipality receives in return to be used for road repair. He mentioned his hopes the city could enact its own wheel tax, which is permitted via new legislation, in order to boost its road funding efforts and potentially qualify for the Community Crossroads program.

The mayor brought the measure before the City Council late last month during a special meeting, though the council did not vote on the matter. The mayor said the council didn’t want to “trump” the efforts of its county counterpart and instead wished the two councils could work together.

Gauck noted the county’s intent to work with the city by considering reducing the surtax, though possible changes in the way the funds are distributed by the state led the County Council to stick with its present proposal.

Prior to adopting the ordinance, the council also heard from a local antique car collector who asked if exemptions or exceptions could be made for those who own vintage automobiles that rarely see use on the roadways. Even though the antique cars are typically garaged, the owner said he still pays for license plates on each of them every year. The council members expressed understanding of the situation but agreed that the matter would likely have to be decided by the state and that if the council pushed for an exemption to the increases in that case, other, similar requests might be presented in the future.