By Stuart Hirsch
The Herald Bulletin
ANDERSON, Ind. —
Madison County municipal officials are feeling a sense of relief following the County Council’s reinstatement of the excise surtax and wheel tax earlier this week.
“I think the County Council acted very responsibly in recognizing the necessity for road paving and street repair,” said Anderson Mayor Kevin Smith.
He said the user fees, usually referred to as simply the wheel tax, “helps the city and county attract new businesses and maintain our current job base.”
The council voted 4-3 to renew the tax on Monday.
The surtax on passenger vehicles and small trucks will be $25 annually; the additional fee for relatively small trailers will be $5. The tax will also apply to recreational and other vehicles.
The wheel tax on tractors will be $40, while the fee for the largest commercial trailers will be $15.
The previous County Council last year voted to eliminate the wheel tax despite objections from town and city leaders who testified that it was a vital source of money to pay for local street and road maintenance programs, It had been in effect since 2009.
In 2012, the county collected just over $3 million in wheel taxes; officials kept $1.35 million for county use, and distributed the balance to other local governments.
In crafting a fiscal 2013 budget last fall, the council allocated more than $1.5 million in general fund revenue for county road maintenance by diverting money from other programs and departments,
But local mayors and elected leaders said they didn’t have that kind of budgetary leeway.
One reason is property tax cap relief passed by the Indiana General Assembly. Others included the 2007-2008 “Great Recession” a still-depressed real estate market, and struggling local economy.
Between 2005 and 2011, for example, Anderson’s annual property tax revenue declined $9.2 million.
All those factors have left the city with minimum road paving budget of about $1 million, Smith said, when Anderson should be spending about $3 million annually.
The city received $1.1 million in wheel tax revenue in 2012.
Like Anderson, Elwood’s city budget has declined drastically from $8 million to $5 million since property tax cuts went into effect, said Mayor Ron Arnold last month after the city council passed a resolution supporting the tax.
In 2012 Elwood received an allocation of $182,000 in wheel taxes.
“As a fiscal conservative, I never want to celebrate the passage of a tax, but one of the critical roles we in city government are charged with is maintaining the city’s road system,” Arnold said on Wednesday. “Unlike other taxes, the wheel tax can only be used on paving roads. So those using the roads are paying to maintain them.”
“Just like very other community, we are hurting for funds,” said Alexandria Mayor Jack Woods. In 2012 the city received an allocation of about $111,000, which supplied money for a paving program that didn’t exist before.
“It’s probably one of the best user taxes we have right now.”
Woods said money from the tax was used to begin a several phase project to rebuild Washington Street. The scheduled second part of the project will have to be suspended this year because no money is available.
The county will begin collecting revenue from the wheel tax in January, but it will take time for funds to accumulate.
Woods said work on the Washington Street project will begin again in the latter part of next year. He wishes it were sooner.
“If we didn’t have that break in between, we could have been a lot further alone, but hey, we all get over hurdles,” he said.
Pendleton received $83,400 in wheel tax money in 2012. “Whatever money we do get really helps us maintain our streets here in town,” said Town Council President Don Henderson.
He said town officials supported the wheel tax when it was first passed and weren’t seeking any increase in funding, “but we certainly wanted to maintain it.”
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