Vehicle excise and wheel taxes won’t increase in Johnson County, as rates were approved to stay largely the same Monday.
Last month, the Johnson County Council asked local highway officials to gather information on how a potential doubling of the rate might impact county residents. Though several members of the council said they would not be in favor of a rate increase, several members wanted to keep that option on the table to raise money for road funding.
Council members wanted to explore the option because county officials face $390 million in road work over the next five years — an amount well above the level of money that can be generated with the county’s current road funding.
The vehicle excise and wheel tax are taxes charged on license plates. Money raised from the taxes is a funding source for state and local roads. The vehicle excise tax is charged for cars, trucks, motorcycles and small trailers, while the wheel tax is charged for large vehicles like dump trucks, semis and buses.
The county first established the taxes in 2008 and the rates were up for renewal this year, as the tax is set up to sunset after 60 months unless the council takes action to renew it. The idea behind the sunset is to allow the council to revisit the taxes periodically in the event state legislators change the road funding formula, said Luke Mastin, the county’s highway supervisor.
The vehicle taxes were originally on the council’s agenda last month as a simple renewal, until an increase option was suggested. The simple renewal is what was ultimately approved Monday with a vote of 5-1, with council member Melinda Griesemer voting against it. Council member Rob Henderson was absent.
The county currently charges between $7.50 for motorcycles, $15 for trailers, $25 for cars and trucks and $40 for large vehicles. Those rates will stay the same for the next 60 months unless the council takes further action.
Officials had thoughts about a hike because a state law that was passed in 2017 allows counties to raise the tax rates to double the previous maximum rate, which was $40.
The current taxes raised a total of $4.24 million in 2021. Of that, $1.78 million was distributed to the county and the remainder went to the state. If the county had doubled the rates, that would have doubled the money for roads.
The council acted on the renewal at the meeting Monday, though Mastin was not able to gather the information they had requested by the time of the meeting.
They had wanted to know the demographics of county residents who pay the taxes, particularly whether the tax increase would have an outsize impact on seniors. They had also asked Mastin to look at how the county would stack up to others if the tax was doubled or increased.
