The Henry County Council voted Monday during a special meeting to raise the local motor vehicle excise surtax and wheel tax in a bid to fix local roads with money from the Indiana Department of Transportation(INDOT). The ordinances had to be adopted before Thursday in order for the new taxes to go into effect at the beginning of the year.
Under the new fee schedule, passenger vehicles, motorcycles and all trucks that weigh 11,000 lbs. or less will be taxed at a rated of $40. The 2016 rate for the annual excise surtax was $25 for those vehicles.
Larger, heavier vehicles that are registered in Henry County are taxed under the county wheel tax at a different rate due to the increased wear and tear that they put on the roads. Until now, all trucks under 30,000 lbs. were taxed at $30 and everything heavier than that were $40. The new ordinance will tax all trucks over 11,000 lbs. at an annual rate of $80.
Trailers of all kinds have been taxed at $5 for many years, regardless of size or weight. The council adopted a new schedule that increases the payment fee as the trailer gets larger. Beginning Jan. 1, trailers that weigh up to 3,000 lbs. will have a $20 fee, up to 5,000 lbs. will get a $30 fee, 7,000 lbs. will be taxed at a $35 rate and trailers up to 9,000 lbs. will require a $40 payment every year. All trailers weighing more than $80 will be taxed annually at a rate of $80.
School buses and church buses that are not tax exempt will be taxed at $40. All other Henry County Wheel Tax rates will increase to $80, including those for farm tractors, semi-tractors and trailers and all other buses.
Combined, the vehicle excise surtax and the county wheel tax are often referred to as the Local Option Highway User Tax (LOHUT).
Henry County Highway Department Engineer Joe Copeland explained that increasing the LOHUT would generate enough revenue that the county could then request money from the INDOT Community Crossings matching grant program.
“We could put up $1 million and they’ll match us a million, so we can get $2 million worth of materials for the roads,” Copeland said. “The only thing this money would go for is materials for the roads.”
Councilmember Steve Dugger pointed out that Henry County currently brings in $903,000 every year through the LOHUT. The tax increase and subsequent grant request could give the highway department $2,615,000 next year to fix local roads, Dugger said.
“We all realize it’s going to take a lot of money to improve the roads of Henry County, and this is the first step,” Dugger said.
Dugger said the previous fee schedule for trailers and other large equipment was set too low from the beginning. He said the graduated pay schedule was more fair to all road users by shifting the financial burden to people who are more likely to damage the roads with heavy trucks and trailers.
Councilmember Clay Morgan said the council has bound itself to revisit the tax if and when the Community Crossings matching grant program ends. Indiana law allows local government bodies to decrease their approved taxes unless they have issued outstanding loans or bonds that are payable by that money.