05022016 - News Article - Wheel tax issue brings strange bedfellows in Portage

Wheel tax issue brings strange bedfellows in Portage
Michael Gonzalez
Post-Tribune
May 02, 2016 - 2:08PM
http://www.chicagotribune.com/suburbs/post-tribune/news/ct-ptb-portage-wheel-tax-advance-st-0502-20160429-story.html

With a City Council vote expected Wednesday to enact the first wheel tax in Lake or Porter counties since the state Legislature approved the plan, backers of the Portage ordinance are facing fierce opposition from Democrats, residents and a conservative political action committee.

A trio of Portage City Council members stepped up the debate surrounding a controversial new wheel and excise tax Friday, proposing their own alternative and suggesting the tax's supporters may not have shared all necessary information with the public.

The issue has snowballed with some Democrats joining Republicans, unions and even the Indiana chapter of Americans for Prosperity joining the debate and making for strange political bedfellows.

Mayor James Snyder and Council President Mark Oprisko, D-at large, recently introduced an ordinance, written by Clerk-Treasurer Chris Stidham, that would impose an annual $25 tax on passenger vehicles and motorcycles, now commonly referred to as a wheel and excise tax, due when registrations and license plates are purchased. A $40 tax on recreational vehicles, trailers and large trucks has since been reduced to $12.50 per vehicle due each year.

The ordinance would be expected to raise about $750,000, said Snyder, a Republican. Thanks to state legislation passed earlier this year, that money could possibly be matched dollar-for-dollar by the state, generating $1.5 million annually for road maintenance and repair, in a competitive grant, something all parties seem to agree is necessary.

Due to property tax caps limiting revenue to municipalities, Portage now can afford to spend about $90,000 annually to pave its 154 miles of local roads and streets.

At recent, local town hall meetings, called separately by Snyder and first-term council members Scott Williams, D-3rd, and Collin Czilli, D-5th, the wheel tax has drawn mixed reviews. The proposed tax comes on the heels of increases in the city's monthly trash collection rate from $12 to $18 and sewage rates from $23.50 to $32.50.

Longtime council member Sue Lynch, D-at large, joined Williams and Czilli for a news conference Friday on the steps of City Hall attended by dozens of city employees on break and other residents. The trio called on the mayor and the city council to slow down talk of launching a new tax and, instead, use $954,582 the city received days ago as its one-time portion of Local Option Income Tax.

"Why are we asking people to pay more?" asked Lynch. "It may be just $25 to some people but it isn't that for others who are struggling and living on fixed incomes or have family illnesses that cost hundreds of dollars each month for medicine."

The trio also singled out Snyder, accusing him of misleading the public and the council on the details of the proposed wheel tax.

"I feel it was irresponsible to present to the public a plan that was not fully understood," Czilli said. "In our opinion, this plan is being rushed through without considering the full effect it may have on our citizens. Personally, I have to question who in City Hall knew about the LOIT funds and why it was not mentioned to the public or to the council. This info has been publicly available to anyone who researched it."

Using the one-time LOIT distribution would buy the city time to consider other options for funding roads, including revisiting a wheel and excise tax next year, Lynch said. She, Williams and Czilli pointed to a summer study group established by the state legislature to examine the new matching grant and other tax-funded initiatives.

Lynch, Czilli and Williams said they've spent several weeks investigating alternatives to a new tax. They also ceded they did not discuss their alternative solution with the mayor or his staff, forwarding their results to fellow city council members Thursday night.

The LOIT money has already been budgeted, and the wheel tax will be necessary if the city wants to generate more money by successfully competing for state matching grant money to fix the streets, Snyder said.

The dozens of city workers attending the conference, many wearing orange stickers reading "Say yes to INFRASTRUCTURE in Portage," watched as their Operating Engineers union leader Jeff Vallas questioned Lynch, Czilli and Williams on their motives for holding a news conference without first meeting with the mayor or his staff to discuss their opposition.

The trio claimed they did not have ample time to meet with city officials, given the amount of time they invested in researching their alternatives.

The three Democratic council members opposing the tax are not alone. The state chapter of the nonprofit Americans for Prosperity has been busy in Portage, calling residents, encouraging them to contact their council members to vote "no" on the wheel tax.

Justin Stevens, director of the group's Indiana chapter, said members have called about 20,000 Portage residents to get them to side against the tax.

"We care because we think local people have the most to say at the local level and have the most ability to create change at the local level," Stevens said. "It's part of our responsibility as a grass-roots organization across the state to inform people about issues that are going to affect them directly."

Stevens said the group will monitor the Portage council vote carefully and may take further action, though he declined to offer specifics on any follow-up if the council approves the tax.

Czilli, Lynch and Williams blasted Snyder, claiming he accused them of getting information from AFP. Snyder acknowledged he emailed Czilli and wrote the trio's comments are "lockstep with the Americans For Prosperity."

Whatever the politics of resolving the wheel tax issue, the city has to act soon, said Joe Calhoun, director of city administration.

If Portage residents want funds to maintain roads, "this tax is necessary," Calhoun said. "If (the tax is not passed), we'll be forced to go back to what our original plan was and every five years go out for a paving bond, which includes interest and other money we have to pay to have that bond written, to be able to pave the roads every five years. That's not enough to keep up the city."