The Evansville City Council had their first reading of the proposed wheel tax at the Monday Aug. 11 meeting.
Residents had questions, and City Council members were able to answer some of them, and add context.
All of the discussion happened during public comment. “I was just looking at the BMV (receipts),” resident Michael Kania said. “My registrations are $80 to $90 so y'all are talking about a 30-percent increase.”
Kania, who owns several vehicles, wanted to know if there were discounts for veterans, and how a “regressive” tax such as this, jibes with a “progressive” bureau of motor vehicles (BMV) system.
Meeting rules dictate that questions can’t necessarily be answered directly, but the city council and city staff painted a financial picture to explain why the tax is being proposed.
The city estimates it will lose $15 million over the next three years, due to state tax changes.
Council member Paul Green expressed frustration at the enacted Indiana Senate Bill1, which reduced property tax captures for schools and cities. “They pass legislation that basically sets cities like Evansville on fire, and then the mayor and the city council has to come and put that out,” Green said. “We have to do this in order to save the services for the residents of Evansville. I don't like more taxes. Nobody likes them.”
City engineer Michael Libitzke discussed the city’s eligibility for state road repair grants — a main driver for pursuing the tax.
“So Evansville has over 1,100 lane miles, and if you look at it, compared to the amount of lane miles that every other community with a wheel tax has in place, that means that we would be eligible for almost 1.2-percent of that money, or anywhere from two to $3 million in fiscal year.”
The grant he’s referring to is only accessible if the city collects its own wheel tax — the county wheel tax doesn’t count.
Such a tax would allow the city to apply for a specific state road repair grant — a grant pool Council member Zack Heronemus said the city feeds into significantly with their tax dollars already.
“All of our money is going up there to Indianapolis, and they're giving us a pittance back and now they're saying, ‘you have to levy a wheel tax on your people just to ensure that you get that pittance back in the first place.’”
The tax would generate about $2.7 million annually. The city estimates it needs $12 million dollars annually to repair roads and stop others from further deterioration. It could use up to $20 million extra annually for several years to update all city roads.
Libitzke said nearly all of the road budget goes to maintaining main roads such as Lincoln, Green River, Burkhardt and Claremont.
“All the local roads we don't touch because we can't afford it,” he said. “We run out of money before we get to a local road."
Following the discussion, Kania said he’d rather see the city pursue a percentage-based fee, versus a flat tax. He said he did learn from the discussion about the state “putting the squeeze” on municipalities, “they're scrambling to try to get some money, and this is one of the ways they're doing it,” he said.
The Evansville City Council will vote on the wheel tax at the August 25 meeting.
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