The Plymouth City Council discussed implementing a wheel tax and excise surtax during their meeting Monday night.
A public hearing was held where Clerk-Treasurer Jeanine Xaver clarified that the wheel tax money can be used for the construction and rehabilitation of roads and streets. It was suggested that implementing a wheel tax could take some relief off of other line items in the budget to help with other General Fund needs. She provided a list of roads that she traveled that could use a facelift.
She also stated that the budget was in good health and that the A+ bond rating is a good rating.
Eric Walsh from Umbaugh and Associates said the driving forces prompting the wheel tax are paving needs, Community Crossings grant opportunities for matching dollars from the state and the lost revenue from the circuit breaker law. Walsh said the city will see a revenue loss of $650,000 just from the circuit breaker law in 2017.
He did note that the city has healthy cash balances and the council members have managed the budget well every year. However, the city is now relying more on the Rainy Day Fund when that hasn’t been done in the past.
If approved, the council can set a rate for an excise surtax between $7.50 up to $25.00 per vehicle. A wheel tax rate can be set from $5.00 up to $40.00 per vehicle. The excise surtax is for small passenger vehicles and trucks. The wheel tax would be applicable on buses, farm trailers, semis and other large vehicles. If the minimum amount is enacted, it would bring in $80,000 while the maximum amount would generate $320,000 on an annual basis, according to figures provided by the Indiana Local Technical Assistance Program (LTAP).
Several residents commented that they would like to see the wage increase for the police and firefighters, but would not support a wheel tax or excise surtax. They did comment that there is a need to fix the roads in the city.
The council would like to have a little more information on the ordinance before it would be formally approved. If it is to be approved, a decision would need to be in place by Aug. 31. An ordinance regarding the municipal motor vehicle license excise surtax and municipal wheel tax was called as first reading and it will be discussed during a budget work session on Aug. 21.
