Wheel tax goes flat

Clark County

Discussion

June 30, 2010

Clark County Council votes down proposal 6 to 1

By BRADEN LAMMERS Braden.Lammers@newsandtribune.com The News and Tribune Wed Jun 30, 2010, 01:41 AM EDT

CLARK COUNTY — The Clark County Council voted to not impose a wheel tax by a vote of 6 to 1 at a special meeting Tuesday night as a meeting room packed with residents and county officials stated their cases on why the fee should or should not be imposed.

“The only thing I want to do is impress upon you guys here that my taxes are high enough,” said Clark County resident J.L. Dreyer. “If you need to do the things that’s necessary for infrastructure, go take it away from other lesser important things. Leave my taxes alone.”

The council listened, with only Councilman Perry Smith voting against a motion to not allow the wheel tax — a tax on vehicles — to be reenacted, which was how the matter was brought to vote. A number of council members offered that county residents have been taxed enough already.

“There’s been other increases to individuals and to taxpayers out there and that is the main reason why I find it difficult to come up with another wheel tax,” said Council President Jack Coffman. “This is a time to look at how we can decrease spending before we get into implementing any extra tax burden upon the citizens of Clark County.”

Councilwoman Barbara Hollis agreed that residents in her district have already been taxed enough this year.

In District 1 — Hollis’ district — an increase of 105 percent in sewer fees has been imposed and a Local Option Income Tax was passed this year, as the latter was for the entire county. The county bridge fund also was reinstituted this year.

“I really do believe it’s a fair tax, it’s a dedicated tax, it’s a user tax,” Hollis said of the wheel tax. “If you drive a vehicle, you pay to have the roads in good shape.”

Although she had previously voted to impose the fee — in 2004 and 2007 — she voted against it Tuesday.

“I don’t feel that I can implement the wheel and surtax at this time,” she said.

Approval of the wheel tax would have instituted a fee for vehicles at a per-axle rate between $5 and $40 for the wheel tax and a license excise tax — which is required to be adopted in order to approve the wheel tax — for vehicles between $7.50 and $25. A wheel tax was in place in Clark County from 2004 to 2007 and was set at a flat rate of $10 for all vehicles.

In 2007, the county council repealed the tax.

Even though the council voted against reinstituting the former county fee Tuesday, it may not be the last time it is brought before the council.

“I’m going to promise you that if it doesn’t pass tonight you will hear from it again,” Coffman said.

The council faced a deadline of June 30 to impose the tax if it wanted to collect any revenues in 2011.

The importance of the what the wheel tax could be used and for lack of funding available in the county was the argument presented by those supporting the addition of the fee.

Possible repercussions

“The only source of revenue we have to maintain the roads for snow removal, maintain [and] fix [the roads] is from the gas tax. Period,” said Commissioner Les Young.

By passing the wheel tax, the county would have had another dedicated funding source for road and infrastructure repair and maintenance. Young said the county pays to pave about 50 miles of road each year on a 10-year paving cycle. The cost to resurface one mile of road is about $40,000, he said.

In addition, the county is responsible for repairing and maintaining 172 bridges, even if the bridge is within a town or city’s limits. Young said between two to three bridges need maintenance work per year.

Figures presented to the council by Young and prepared by Clark County Commissioners’ attorney Greg Fifer said the total amount received from the wheel and related taxes in 2004 was $2 million. The money was disbursed throughout the county to each city and town with Clark County’s portion of the funding in 2004 equaling $1 million. By 2007, the rate had been reduced by about half and the tax brought in $1.1 million and $533,000, total and to the county, respectively.

In addition the money would be used to provide local matching funds for road projects.

“Back when you all had the wheel tax, a lot of these projects were started,” Young said. “They’re needed projects.”

Without a source of funding for local matching money, the future of the projects may be in question.

“We are at the point that those projects have been in the pipeline long enough; we need to be finding a commitment for the local match to get those to bid by next year at the latest,” Fifer said.

Projects under way and with a match required soon include St. John Road and Star Hill Road. Another road project presented — and slated for construction in 2014 — is the widening of Salem-Noble Road.

The cost of the project would be $11.5 million, $9.1 million of which comes from federal funds. The county has already spent $388,500 and the total local match equals about $2.3 million, said Jorge Lanz, of Jacobi, Toombs and Lanz.

“If Clark County does not take advantage ... that 80 percent of federal funds will go to other communities in Clark and Floyd counties that can come up with the 20 percent local share,” Lanz said.

Fifer even offered an alternative to save the county money if the council voted to reinstitute the wheel tax.

“Even reinstituting the wheel tax at the $20 rate would be far preferable than from a public policy and a public benefit standpoint than continuing to implement a $34 annual recycling fee,” he said.

Affect on the county’s excess levy appeal

A larger affect from the wheel tax denial may be felt on the excess levy appeal the council is asking the Department of Local Government Finance to approve in 2011.

“Historically, the [DLGF] in looking at appeals has looked at what the taxing unit has done for itself before it considers increasing any property tax levies,” said Dan Eggermann, a consultant who has been hired to advise the council on its 2011 budget and in seeking its excess levy appeal.

Eggermann would not offer an opinion on to what extent not imposing the tax may have on the county’s chances of receiving the excess levy money. Coffman believes that not approving the wheel tax may influence the appeal.

“It may affect it ... but if we have to go before the DLGF and explain why we did not reenact the wheel tax, I think we have a valid reason,” he said. “We feel like the citizens of this county did not want it reenacted and we have to follow [their] wishes.