While Indianapolis’ proposed wheel tax is in flux, Beech Grove continues to move forward with a plan of its own.
“It's a hard decision,” Beech Grove Mayor Jim Coffman said during a July 6 city council meeting. “No one wants to tax their residents; no one wants to increase taxes.”
The Beech Grove council has proposed a fee of $25 a year — and $40 for commercial vehicles — compared to a minimum flat fee of $100 and $240 for commercial vehicles in the plan vetoed by Indianapolis Mayor Joe Hogsett.
Beech Grove councilors are expected to do a final vote on the proposal during the Aug. 3 council meeting.
Here’s what we know about the various efforts to raise wheel taxes.
Beech Grove proposes a lower tax increase than Indy
Indianapolis’ proposal does not include Beech Grove.
Indianapolis Mayor Joe Hogsett vetoed a wheel tax that would have raised more than $78 million for road repairs and maintenance throughout Marion County. That includes $70.95 million for Indy and $7.44 million for other cities and towns.
The City-County Council is considering whether to override the veto.
The southside city decided against joining Indy’s proposal, seeking instead to pass a smaller tax of its own. Had Beech Grove joined Indy’s proposal, it would have brought in $1.22 million for the small city. Instead, the city’s proposal would bring in an estimated $500,000.
Beech Grove officials said the goal is to generate adequate funding for road infrastructure without burdening residents. Clerk Treasurer Samantha Stratton said she’s willing to give up the additional funding if it means less stress on residents’ wallets.
“Obviously we do need that money,” Stratton said, “but that's just another burden on (residents) them that I don't think they deserve to take on.”
While Indy’s plan has stalled, it’s not dead yet. At least 17 of the 25 city-county councilors would have to agree to override the veto to keep the plan alive. So far, around 15 councilors are in support.
The City-County Council may pick up the override as soon as Aug. 10.
How are road funds distributed to excluded cities?
Keeping the wheel tax low in Beech Grove comes at a cost — significantly less road funding for the southside city.
Over the past few years, Marion County has overseen vehicle tax funds for excluded cities such as Beech Grove, Lawrence and Speedway. For example, when Beech Grove residents pay their annual car fee, the funds go to the county before they’re distributed to Beech Grove to cover road infrastructure projects.
An average car owner in Marion County currently pays around $20 a year. That generates an estimated minimum of $250,000 for the southside city, an amount which is matched with state funding, according to Stratton.
The debate over wheel taxes comes after the legislature approved new road funding guidelines. The legislation allows certain municipalities to adopt a wheel tax and qualify for additional state funding.
Could lawmakers change the funding structure?
The decision isn’t simple. Coffman said he’s heard Indiana legislators might try to change the law again, allowing cities to stack a county fee on top of a city fee — which could potentially force Beech Grove residents to pay both Marion County and Beech Grove’s tax.
“We don't really know what their plans are,” Coffman said. “Whether it be property taxes or local income tax, wheel tax. All these taxes they're going to put on the backs of local municipalities to figure out, and that's what they're doing.”
If that happens, Beech Grove officials say they would likely rescind its vehicle tax for the following year.
What about Lawrence, Southport and Speedway?
Although Southport is an independent city, its population is below the threshold for its own wheel tax. So, those neighbors would be required to pay any fee approved by Indianapolis, and could receive an estimated $178,080 in funding if Indy’s current plan goes through.
It’s unclear what steps Lawrence and Speedway may take.
Lawrence, on the northeast side of Marion County, passed new vehicle taxes last year. They require vehicle owners to pay $25 for cars, motorcycles and small trucks, and $40 for buses, RVs and heavy trucks and trailers, with the goal of collecting $3 million, according to Lawrence’s documents. Ending those payments and switching to Indy’s plan would provide around $3.8 million. Lawrence officials did not respond to a request for comment.
In Speedway, town officials did not say whether they plan to discuss this matter or potentially join Indy. Under the Indianapolis proposal Hogsett vetoed it would receive $1.09 million.
“The Town of Speedway is aware of the ongoing discussion,” Director of Communications Cheryl McElroy said in response to questions from Mirror Indy. “At this time, the Town is not taking a position on this matter. Our focus remains on providing quality municipal services and continuing the work that serves our residents, businesses, and visitors every day.”
This article first appeared on Mirror Indy and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License
