Will the jail wheel tax really go away?

Published 5:16 pm Wednesday, March 15, 2023

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The wheel tax that is currently paying off the debt service for the Claiborne County Jail is looking down the long barrel to extinction within the next few years. Once paid off, the tax is supposed to go away. At least, according to the resolution, it should.

The document formally adopting the wheel tax was approved in September 2003 by the Claiborne Commission and went into effect on Jan. 1, 2004.

According to Eric Pearson, Claiborne County Finance Officer, the last payout for the jail debt will occur in April 2026.

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At that point, the wheel tax should be considered null and void. However, the county commissioners would have the leeway to adopt a resolution amending the use of the existing wheel tax funds to help pay off other debts.

A few months ago, the commissioners decided to hang on to the wheel tax created for the Claiborne Highway Department. At the time of its adoption, oral promises were made to do away with this wheel tax once the $5 million in debt racked up by a previous road commissioner was paid off.

The actual resolution, however, specifies only the fund ratio to be used to pave and/or tar and chip county roads. A portion of the document also designates funds to cover the cost of purchasing new highway department vehicles.

The difference between these two wheel taxes is the jail tax does specify in black and white just when the wheel tax will go away. The original highway department wheel tax says nothing concerning an end-date. The oral promise that was made to stop this tax once the $5 million in debt was paid off is not mentioned in the document.

Pearson said during an interview that, as of April of the current fiscal year, the county will have whittled the jail debt down to $1,896, 500. The current year’s $703,000 – half of the revenues collected by the wheel tax – will go toward the annual jail debt payment of $695,500. (The interest payment on this bond is $115,500 for the current fiscal year.)

“For the 2024 budget, the one the committee’s deliberating, we’ll probably leave everything pretty much as the (proposed balances) are – half of the wheel tax is going in there. I’m going to be recommending that they balance the budget without taking anything out of the fund balance,” said Pearson. “Regardless, they will still have to balance the debt service fund and figure out how much of that fund balance they might be able to use. They probably won’t want to run (the balance) down to zero. They’ll want to have some funding in there. That’s a policy decision they will have to talk about.”

This early in the budgeting process, it’s anyone’s guess just when the jail wheel tax will end. Once the proposed budget is completed by the committee, it will be presented to the full Claiborne County Commission for adoption.