GREENFIELD — Want to pay a little extra on your fast food so you can drive on smoother roads?
That’s the tradeoff the Hancock County Council is willing to make to put more money into the hands of the county street department. The council Wednesday agreed to ask the state Legislature for permission to increase the food and beverage tax by 1 percent.
If approved, the increase would generate roughly $800,000 a year, which county officials would use to pave and maintain rural roads.
But it would also mean extra money out of the pocketbooks for anybody who dines in Hancock County.
If you ask Hancock County Council members, the choice is simple. Elected officials for the last five years have been debating how to better maintain rural roads and still have money on hand for major infrastructure projects for economic development.
If $800,000 can be raised through restaurant dining, they say it solves the problem.
“Throughout the state there’s a need for more money for roads,” said Councilman Jim Shelby, who proposed the tax hike. “This is one cure for that.”
Currently the tax on dining in Hancock County is 8 percent: 7 percent sales tax, plus 1 percent food and beverage tax. Half of that food and beverage tax raises money from all donut counties to pay for Lucas Oil Stadium; the other half goes into Hancock County coffers.
The increase would put the total tax on food at 9 percent: your $1 hamburger will cost $1.09 now, instead of $1.08.
According to the Hancock County Auditors’ office, roughly $514,000 of food and beverage revenue came into county coffers in 2014. The end-of-year cash balance for the fund was $1.2 million.
For years, the county council has been using food and beverage revenue as a slush fund. Don’t know how to pay for that unexpected building repair? Dip into the food and beverage fund.
Shelby says if the tax is increased, all of the additional money would be earmarked for road maintenance.
“This money would actually be sequestered in a fund dedicated to road maintenance and/or capital (improvements),” Shelby said.
But whether state lawmakers will agree to the change is the question.
Shelby said last year there were two bills before the Indiana General Assembly: one would have allowed all counties to raise their food and beverage tax; the other named specific counties. Those bills did not make it to state law.
By passing the resolution Wednesday to ask for the tax hike, Shelby says it puts Hancock County in line should the Legislature approve a bill this year.
“This might be a two-, three-, or four-year process,” Councilman Kent Fisk said. “It may never happen, but it might.”
The possible change represents a fundamental shift in how to fund road maintenance.
In recent years, the county council has been dipping into the County Economic Development Income Tax fund to supplement highway department money for paving and chip sealing.
But Shelby said that fund needs to be built up for big-ticket items that will help economic development. Federal grants could be used to develop roads for large corporations hoping to locate here, Shelby said, and those grants require a local match.
To complicate matters, a portion of CEDIT money funds the Hancock County Public Library. Councilman John Jessup suggested asking state lawmakers to get the library’s tax outside of the county’s maximum taxing limit, but all other members said asking for an increase in the food and beverage tax was a better approach.
The resolution to approach state lawmakers was unanimously approved with little discussion. Council President Bill Bolander believes Hancock County’s food and beverage tax would be no different than Marion County’s, so it’s possible the change isn’t significant.
Gary Pool, engineer of the county highway department, said currently the county spends about $1.2 million a year in roadwork.
An additional $800,000 could mean about 11 more miles of paving; 53 miles of chip seal work; or 20 miles of strip paving.
“It would be a hybrid of those things,” he said.
Ideally, Pool said the county should be on a maintenance program where each of the roughly 700 miles of roads are maintained every five years.
“I’m currently on a 10-year rotation, and I’m short-changing the paving,” Pool said, adding that he realizes folks might not want to pay additional money at restaurants. “There’s always a balance – how do they feel about roads versus how do they feel about taxing?”