Knox County officials say Indiana’s new road funding law may force them to consider a wheel tax.
Beyond the Headlines: Wheel Tax
House Bill 1461, passed earlier this year, changes how transportation money is distributed. A portion of funding will now flow through the “lane-mile direct distribution” program, which requires counties and cities to adopt what’s known as a local option highway user tax. That tax combines a wheel tax and an excise surtax on registered vehicles.
Commissioner Kellie Streeter said the change means local governments have to act to keep receiving money they’ve relied on for years.
“House Bill 1461 prescribed that it was mandatory to pass this tax to get a portion of the motor vehicle highway account. So we have to pass it if we want the new lane mile direct distribution of funding. We can still apply for the grants, but we won’t get the direct distribution,” Streeter said.
The amount drivers could pay varies depending on the vehicle. Streeter noted the fees would apply to passenger cars, trucks, trailers, and even RVs.
“If you have multiple cars, if you have trailers, if you have other forms of equipment like semi trailers and semi tractors and busses and campers or RVs, you’re going to pay one of these fees on all of those. And it isn’t a fee we pay now in Knox County. To have to pass a mandatory set of taxes to receive funding that we’ve received for years in another format is very frustrating to me. And it has been all through the legislative session.”
Council President Mike Morris said county leaders are still sorting out what the law will mean and plan to hold public meetings in the fall.
“As a county council, we’re planning on having some meetings in October and November because we don’t really understand this, but we do, but we don’t. The average citizen, we would invite, come sit down and let’s learn together,” Morris said.
He added the council is not rushing the decision.
“We don’t want to do this, but we also don’t want to regress and go backwards. Can we fix it all at once? Absolutely not. But can we continue improving? Yes, we can.”
