Changes to wheel tax could yield county extra $375,000
Is paying $11 more dollars a year for your car's license plates worth it for better cared for roads in Putnam County? The County Council is pondering this exact question.
The Council met with John Habermann of Purdue University's Local Technical Assistance Program during Wednesday's monthly meeting to discuss what kinds of revenue the county might expect to raise if the county's motor vehicle excise tax and wheel tax were to be raised.
Habermann first explained that while both taxes are commonly described under the umbrella term "wheel tax," they are separate.
A county's motor vehicle excise applies to all passenger vehicles, motorcycles and trucks under 11,000 pounds. It may be applied as either a percentage of the state's annual license excise tax or as a flat rate for all vehicles of this class.
Applied as a percentage, the county excise tax can be between 2 and 10 percent of the state excise tax, but not less than $7.50 on any individual vehicle. As a flat rate, it may fall between $7.50 and $25.
The actual wheel tax applies to larger vehicles, including buses, RVs, semis, trailers and various other commercial vehicles. The county council individually sets the wheel tax for each of 14 different classifications of these vehicles at flat rates between $5 and $40.
Putnam County currently applies a 10 percent county excise tax. By calculations presented by Habermann on Wednesday, this nets the county $308,598 for the more than 33,000 vehicles in this category.
Habermann then presented the county with the numbers if the rate were changed to a flat rate of $20 per vehicle -- the average rate for the state's 92 counties.
Under this plan, the county would bring in $657,987 from the excise tax.
The difference in the two collections averages out to an additional $10.54 per car.
Changes to the wheel tax Habermann presented were actually smaller tweaks. Most of the rates presented were the same, but several categories were increased, while others were decreased.
As Habermann presented the possibility, though, the county's wheel tax collections could grow from $74,333 to $100,725.
As a single pot, the county's total collections on both taxes could go from $382,931 to $758,713 -- a difference of $375,782.
Elected officials are rarely fans of tax hikes -- especially in an election year -- but the prospects of nearly $400,000 more in road money annually certainly did not look like a bad thing to any of them.
While there were a number of questions the council asked of both Habermann and the audience of approximately 20 people, Councilman Keith Berry asked the evening's most telling question.
"Is there anyone here who is not in favor of this tax?" he asked.
Not a single hand went up.
Greencastle City Councilor Jinsie Bingham was in attendance and shared her thoughts with the board.
"I would much rather pay the wheel tax than buy a tire," Bingham said. "This is an opportunity for everyone in the county to benefit. I own three vehicles (that would be affected) and it's still cheaper than replacing a tire."
One thing councilors are also considering, though, is that this would come nowhere close to solving the county's road funding problems.
"Everybody needs to realize that this amount of money is just a band aid," Larry Parker said.
The money would only go so far. It currently costs the Putnam County Highway Department more than $93,000 per mile to build a road 4 inches deep and 20 feet wide.
Chipping and sealing a road costs just short of $10,000 per mile.
At a recent meeting, Commissioner Gene Beck estimated it would cost the county $72 million in materials and labor to fix every road in the county.
But with other avenues also being explored, the possibility of the new wheel tax money is what Council President Darrel Thomas called "a piece of the puzzle."
The county's timetable on possibly enacting an increase to the excise and wheel taxes is not currently tight. If the council signs the ordinance by July 1, it will be in effect for 2013. If not, it will not take effect until 2014.
With more than three months to work with, no one wants to rush into a decision.
Councilor Roger Deck suggested each councilor consider the information from Habermann, research more information and come back to April's meeting with ideas.