It just got a little more expensive to own a vehicle in Munster.
The Munster Town Council on Monday passed an ordinance adding a local tax to cars, trucks, tractors, trailers and motorcycles — anything with an Indiana license plate.
At the time a Munster resident renews a license plate through the Indiana Bureau of Motor Vehicles, a $25 surtax will be applied to passenger vehicles and trucks under a gross weight of 11,000 pounds. Motorcycles will be taxed at $12.50.
Correspondingly, a new $40 "wheel tax" applies to buses, recreational vehicles, farm tractors, semitrailers and trucks over 11,000 pounds (wheels themselves are not taxed), following Northwest Indiana communities Crown Point, Portage and others in enacting similar measures.
Council members expressed that they had little choice but to pass the tax if they wanted to maintain the quality of roads throughout town, rather than see them fall into disrepair and incur greater costs rebuilding them eventually.
"I'm not pleased, but we have to maintain our roads," said Councilman David Nellans, R-4th, who made the motion —"with regret" — on second and final reading to unanimously approve the tax.
Council President John Reed added, "The last thing I want to do is pass a tax," explaining the tax does not create a new bureaucracy, but will be administered on the state level through the BMV.
One Munster resident questioned whether he would have to pay the tax on several classic cars he owns and drives infrequently, learning there is no exception under the state statute that enables the surtax.
With significant reductions from the state to fund road repairs, the town has struggled financially to maintain its streets over the past several years. As such, the state gave cities and towns with a population greater than 10,000, in a county that does not levy a motor vehicle surtax and wheel tax, the power to impose a tax at a local level.
Town Manager Dustin Anderson prepared a detailed evaluation of Munster's roads based on the Indiana Department of Transportation's (INDOT) Technical Assistance Program Pavement Surface Evaluation Rating system. The report identifies more than $20 million in potential road maintenance work, noting that Munster's roads rank an average of 5 on a 10-point scale.
Town officials estimate the surtax and wheel tax can raise more than $500,000 annually.
The state will make additional road funding available next year through a $186 million fund from which eligible communities can apply for up to a 50 percent matching grant based on what they collect from the surtax and wheel tax.