(Fulton County) Wheel tax considered

The Rochester Sentinel
By Wesley Dehne, Staff Writer
4/23/15

The Fulton County Council may implement a wheel tax, or county vehicle registration fee, to help cover the expense of road repair and maintenance.

Finance experts say the tax could generate as much as $738,351 for the county and municipal roadwork.

The council plans a public hearing about the proposed tax May 19.

Todd Samuelson and Heidi Amspaugh of H.J. Umbaugh & Associates, hired to prepare a county excise surtax and wheel tax analysis, presented their report to the council Tuesday.

The report details estimated revenues, based on 2013 information collected by the Indiana Bureau of Motor Vehicles.

Excise tax rates may be imposed two ways – a specific amount of not less than $7.50 and not more than $25 per vehicle, or a rate of 2 to 10 percent of the cost of the vehicle. The excise tax applies to cars, trucks under 11,000 pounds and motorcycles.

Wheel tax rates, $5-$40, may be imposed for different classes of vehicles based upon their weight.

The report assumes all classes and types of vehicles are taxed at the same rate. Included in this tax are buses, recreational vehicles, semitractors, farm tractors, trailers, farm trailers and trucks over 11,000 pounds.

A branch processing fee of 15 cents per vehicle is charged by the BMV to administer these taxes. Samuelson noted rates could vary depending on what county officials choose.

Based upon BMV statistics the minimum surtax of $7.50 would produce a net annual revenue of $160,796, and the maximum $25 surtax would produce $543,643. A minimum wheel tax of $5 would produce a revenue of $23,697, and the maximum would produce $194,707.

For counties with a population of 50,000 or less, the excise tax and wheel tax revenues are distributed by a formula. Twenty percent of the revenues are distributed based on population, and 80 percent of the distribution is based on miles of roadway maintained. According to U.S. Census Bureau 2013 statistics, Fulton County has a population of about 20,449.

If the council implements the minimum excise and wheel taxes, the combined total revenue would be $184,493. Maximum revenue would be $738,351.

Amspaugh presented the commission with potential allocations of those revenues.

The county would receive about 87 percent, at $160,081 annually on the minimum option and $640,652 on the maximum. Rochester would receive almost 10 percent; Akron, 1.7 percent; Kewanna, 1.12 percent; and Fulton, .56 percent.

County officials can opt to choose any amount between the minimum and maximum taxes. Amspaugh noted county officials need to implement and adopt an ordinance specifying tax rates by the end of June to begin collecting revenue Jan. 1, 2016.

Council member Phyl Olinger asked Amspaugh if BMV statistics for 2014 would be available before the council has to make a decision. Amspaugh said they would try to obtain those.

Taxes would be collected by the BMV, sent to the treasurer’s office and be allocated by the auditor’s office. Miami, Kosciusko and Cass counties all have a wheel tax in place.

County Highway Superintendent Rick Ranstead questioned if revenue could be used for labor. Amspaugh said she was unsure and would check into how money could be allocated.

“This is not an answer to all our problems,” Council President Gary Sriver said.

Samuelson told the council if an ordinance is adopted by June 30 and collection of revenue begins in 2016, funds may not hit the county’s revenue stream until 2017.

Mark Kepler, Purdue Extension educator, asked the council if buggies would be included, noting LaGrange County has included them. County Auditor Judy Reed said buggy registration is handled through her office and not through the BMV. The $40 registration fee for buggies benefits the highway budget and the county general fund.

Ranstead said the extreme cold and snow this winter was especially hard on county roads. So hard, he said several times, it’s the worst year for potholes he’s experienced in quite awhile.

A wheel tax has been proposed before.

The council voted down a proposed wheel tax in May 2008. That proposal called for a 6 percent excise tax on cars, pickup trucks and motorcycles and $10 to $40 fee for all other licensed vehicles. Former Councilman Earl Gaerte and Sriver voted in favor of the tax. The rest of the council said no.

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