Commission Considers Enacting Wheel Tax

Huntsville, TN (2011-10-03) With the 2011-2012 budget depleting fund balances to dangerously low levels, County Mayor Jeff Tibbals has suggested the implementation of a wheel tax to increase county revenues. The Intergovernmental Committee has recommended the full Commission accept his plan and impose a $30 wheel tax by vote of the county legislative body.

With the possibility of at least a fifteen percent property tax increase looming to balance next year’s budget, Mayor Tibbals has proposed the implementation of a Wheel Tax to the Intergovernmental Committee Monday night. If imposed, the tax would help offset nearly $16 million in school construction debt. “The wheel tax would not necessarily be permanent. If the debt is retired, so would the wheel tax,” Tibbals noted. If earmarked for existing school debt, the wheel tax would likely last for a minimum of 27 years, unless an increase in other revenues and provisions in the bond issue would allow for earlier pay off.

Tibbals noted that in neighboring counties, those with a lower property tax rate than Scott County, all had implemented a wheel tax, while those with higher rates invariably had not implemented one. While rates varied from county to county, Tibbals recommended setting the rate at $30 per registered vehicle and $15 per registered motorcycle. As proposed, certain vehicles would be exempt, including antique cars, commercials vehicles, tractor-trailers, and vehicles owned by veterans with 100% services related disabilities. Given the current number of registered vehicles, Budget Committee Chairman Willie Boyatt estimated the proposed levy would generate about $450,000 in new revenue.

According to Mayor Tibbals, the county has three options for passing a wheel tax: 1) Passage by the county legislative body of a resolution requesting the issue be placed on a referendum ballot; 2) Passage by two-thirds majority votes of the county legislative body in two consecutive meetings; or, 3) Request the passage of a Private Act by the Tennessee General Assembly.

If the County Commission chooses to pass the issue on two consecutive votes of the body; then, the registered voters have the right to force a referendum on the issue by gathering the signatures of at least 10% of the number of persons that cast ballots in the last gubernatorial election. According to Mayor Tibbals, that would be approximately 472 persons.

If the Commission does not pass a wheel tax, Mayor Tibbals suggested that property owners might be facing as much as a 15% tax increase. This comes on the heels a 12.5% increase in 2010.

By a vote of 5-0, with Commissioner Dennis Sexton passing and Commissioner June Jeffers absent, the Intergovernmental Committee agreed to recommend to the full Commission passage of the wheel tax issue by two consecutive, two-thirds majority votes of the county legislative body.