Indianapolis city councilors are considering a proposal to increase the county vehicle tax to fund road repairs. The proposal, introduced by City-County Councilor Andy Nielsen, would raise the annual excise tax to a flat fee of $100 for all vehicles, and increase the wheel tax for heavier vehicles.
Background
The city has been struggling to pay for road improvements due to recent state-level changes to property taxes, which are expected to result in a loss of $10 million in property tax revenue this year, and $20 million and $30 million in the next two years, respectively.
The state has offered to provide $50 million in road funding per year if the city can raise at least that amount annually. However, some council members have expressed concerns that the tax increase would be a burden on low-income families and small businesses.
Alternative Proposal
Mayor Joe Hogsett has proposed an alternative plan to raise the $50 million without increasing taxes. The plan would use $10 million already allocated in the 2026 budget, $10 million allocated in the 2027 budget, $5 million from stormwater fees, and $25 million allocated through a 2027 spring fiscal ordinance.
Councilor Nielsen has expressed concerns that the city budget may not be able to absorb the cost of the alternative plan, and that it may require cutting other city services. The proposal will be up for a committee vote at the Rules & Public Policy Committee hearing on June 16.
Original reporting: Mirror Indy — read the source article.
