Wednesday, April 13, 2016

04132016 - News Article - Communities mull wheel tax to fix roads



Communities mull wheel tax to fix roads
Carrie Napoleon
Post-Tribune
April 13, 2016 - 6:58PM
http://www.chicagotribune.com/suburbs/post-tribune/news/ct-ptb-regional-wheel-tax-st-0414-20160413-story.html



Some local officials, searching for money to pay for road maintenance and repairs, are considering whether a recent change in state law that allows for governments to impose wheel taxes may be an answer to their fiscal woes.

Communities around the area are considering whether to implement the new wheel tax option enacted by the state legislature at the end of last session. The new legislation allows local units to enact a tax of $25 for passenger vehicles and $40 for recreational vehicles or motorcycles.

It also gives those communities a chance to receive matching funds for any money collected through the tax for shovel-ready road projects, said State Rep. Ed Soliday, R-Valparaiso, lead sponsor of the legislation.

Soliday, who heads the roads and transportation committee, said the legislation came in response to a call from local unit officials asking for a way to raise funds to address what are becoming critical infrastructure needs. Creating the option for local units to enact the tax puts the choice on whether or not to tax in the hands of local officials.

Concrete lasts 30 to 40 years, he said. Asphalt only lasts 20 years.

"We have some cities on repaving cycles of 88 years, so we gave them what they asked for," Soliday said.

An ordinance creating the wheel tax in Portage cleared first reading last week.

Portage Councilmen Collin Czilli, D-5th, and Scott Williams, D-3rd, are holding a town hall meeting on the tax at 2 p.m. Saturday at the Portage Public Library, 2665 Irving St., to hear from residents.

The City Council is poised to vote on the wheel tax at its 6:30 p.m. May 4 meeting at Woodland Park.

For older communities like Gary, beleaguered by miles of aging infrastructure, a wheel tax could bring in approximately $4.8 million a year for new roads and maintenance.

"I have absolutely reviewed it," Gary Mayor Karen Freeman-Wilson said.

The wheel tax of $25 per car and $40 per recreational vehicle or motorcycle would provide a cash infusion for infrastructure and build on the state's release of roughly $3 million in local option income tax funds held back by the state that have to be dedicated to road improvements.

The decision to enact a wheel tax ultimately lies with Gary Common Council and some members, she said, have expressed interest in looking further into how it may benefit the city. Freeman-Wilson said the city needs to maximize its funds under the new legislation relative to the wheel tax and relative to the matching funds available from the Indiana Department of Transportation.

"Under the appropriate circumstances, it means an opportunity to do some significant paving, and also enter into the sidewalk realm," Freeman-Wilson said.

Soliday said the legislation was designed to help local taxing units maximize their road improvement dollars with several options. The state has set aside $186 million in matching funds local units can tap using funds raised from the wheel tax along with funds from the redistributed local option income tax funds or rainy day fund money.

Another $65 million in matching funds will be available the second year and then $100 million in matching funds will be available every year after that, he said.

"They don't have to pass the wheel tax to get matching money," Soliday said.

Taxing units, however, have to pass the wheel tax by July 1 if they want to tap into those dollars beginning Jan. 1. The wheel tax also can be cumulative and enacted on both the municipal and county levels giving counties access to a substantial amount of new revenue.

Lake County Council officials, however, say they are not ready to support a countywide wheel tax. Council President Ted Bilski, D-Hobart, floated the idea several years ago and it gained little traction with fellow officials and taxpayers.

Bilski said since the county is responsible for unincorporated roads, the measure would best be introduced by the councilman representing those areas.

Councilman Eldon Strong, R-Crown Point, said he would not be introducing the measure.

"At this time I don't feel it has the support of the board," Strong said.

Bruce Spires, Merrillville town manager, said officials there have not yet formally discussed the possibility of a wheel tax but he expects they will at the next town council workshop. He said it could be a cost-effective way to tackle the town's infrastructure needs and give taxpayers a bigger bang for their buck. Currently Merrillville, like many other units, uses general obligation bonds to pay for road repairs.

"It might be less of a cost to our taxpayers to pay a wheel tax than to fund the repaying of general obligation bonds," Spires said, adding the possibility of getting matching funds to stretch those dollars even further is worth looking into.

In Valparaiso officials also have been studying the issue.

"We explore every option," City Administrator Bill Oeding said. "We're doing our homework. We're doing due diligence."

He said it is still too early, however, to say if anything is going to happen.

"We don't do anything like this without having a plan," he said.

The city also wants to be certain that the downstate matching grants will be available.

Public Works Director Matt Evans gave a presentation about the city's lack of money for road maintenance at the March 14 City Council meeting.

He told the council members that the $1 million the city now budgets annually for road repairs doesn't allow them to maintain the current roads, much less make significant repairs.

It would take at least $3 million to $3.5 million for Valparaiso to keep the streets sustainable, Evans said.

Soliday said state funding will be available, but the distribution will be more closely monitored than it was for Major Moves, where some money was spent for projects other than roadwork.

Crown Point officials are among those considering what impact a wheel tax would have.

City Council President Andrew Kyres said Mayor David Uran asked the council to consider the wheel tax at its April meeting. The matter was referred to the city's ordinance committee, which will review the information Thursday so it can be discussed at the full city council meeting in May.

Carrie Napoleon is a freelance reporter for the Post-Tribune.

Freelance reporter James D. Wolf Jr. contributed.

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