Every taxing unit in Indiana is trying to navigate through the confusion in the wake of Senate Bill 1, and the county is no different.
The newly passed legislation rewrote how property taxes are to be distributed by the state to municipalities and taxing units.
One thing is for certain, state legislators are forcing local ågovernments to find other ways to fund services.
On Tuesday, the Montgomery County Council met for its regularly scheduled monthly meeting and a discussion on raising the county wheel tax to the maximum rate of $80 was discussed. The current county wheel tax is $60.
A raise in the surtax also was part of the discussion. The current surtax rate is $40 per vehicle and would increase to the maximum $50 per vehicle.
Councilman Brett Cating understands the need for the county to raise more funds for the county highway department, especially in light of the pending state funding cuts. However, he also said the council needs to remember the city of Crawfordsville is gearing up to implement its own wheel and surtax rates.
“We have to be aware that if we raise our county wheel tax and at the same time the city implements a wheel tax, the people in Crawfordsville are going to be double dipped,” Cating said. “It is obvious the state is trying to make local governments tax the people more so they do not have to take the heat for increasing what people pay.”
Council President David Hunt said the need to improve county roads must remain a focus point for the council. Yet, with the new state law if the county does nothing, maintaining roads is going to be even more difficult. He added he was disappointed in the actions of state legislators.
“The number one complaint I get is the condition of our county roads,” Hunt said. “It is common knowledge our highway department is woefully underfunded.”
Moving the wheel tax to the maximum rate would raise approximately an additional $454,600 to be used on county roads. The estimated wheel tax collected would be $1,963,740. The otal collected in 2024 was $1,509,140.
The council conducted the first reading of the ordinance to adjust county wheel and surtax rates.The next scheduled council meeting is at 9 a.m. July 8, at which time the members can adopt the ordinance. It would take effect in 2026.
Another point of discussion was on the changes associated with local income taxes. Presently, only a county can impose such taxes. The new legislation allows any taxing unit to impose a LIT.
“Any county can impose a local income tax,” said County Attorney Dan Taylor said. “But now so can any city, town, township, school district, library district and fire district can impose a new local income tax.”
Cating is going to ask Indiana State Rep. Jeff Thompson to attend the next meeting to discuss the changes being initiated with the passing of Senate Bill 1. Thompson, a Republican, represents House District 28, which includes portions of Hendricks, Boone and Montgomery counties. He is chairman of the House Ways and Means Committe. The Lizton resident has served since 1998.
