Will the county have a $70 wheel tax?

Published 12:19 pm Tuesday, May 16, 2023

The Claiborne Commission performed an acrobatic maneuver on Monday evening when they decided to reconsider the controversial adoption of a wheel tax that could alleviate much of the shortfall associated with this year’s budget.

A resolution to create a $50 per year, per vehicle property wheel tax died before making it to the floor due to a lack of a second to the motion to consider the document.

During the closing moments of the meeting, Commissioner Whitt Shuford asked that the issue be reconsidered.

A short break was taken and when the 21 commissioners resumed their seats, the request barely moved forward with 11 voting to revisit the topic. When the dust settled on discussions, the commission voted 15 to six on first reading in favor of creating a $70 per year, per vehicle wheel tax. The tax resolution will need to undergo a second reading before it is officially adopted. Or, the public could decide with just a petition of 1,000 signatures whether the matter will be sent to a referendum vote.

Shuford explained his concerns and why he prefers a wheel tax.

“The question I’ve been getting the last couple of weeks is ‘how did we get here? Why are we discussing such a large tax increase?’ If you look back at the tax rates that the county has had over the last 18 years, we basically had a ten-cent decrease in our property taxes. Yes, I’m very well aware that your assessments have gone up, so your taxes have not remained the same. The tax rate itself, in 2005, was $2.61. If you average that out over the last 18 years, that’s $2.51 which is a net increase of ten cents in 18 years.

“The reason we’re having this discussion in simple terms is that we borrowed from Peter to pay Paul and now it’s time to pay dues.”

Shuford pointed to the proposal by the Budget Committee to raise the tax rate by 25 percent to $2.50 per $100 of assessed value. Or raise the rate to $2.30 – a 15 percent increase – and create a $50 wheel tax to make up the difference.

“I have spoken to people and they are in total agreement with me that it is unfair to saddle all the property owners with this burden. Everyone I have spoken to would prefer to have a tax increase that is fair to all residents of Claiborne County which, as you know, is the wheel tax.

“I am aware there will be those who would prefer to raise property taxes by 30 cents or 50 cents. But, when I explain to them that, if that were to happen, anyone who is paying rent to live on property that they don’t own – that when your landlord’s taxes go up, they’re not going to eat those increases,” said Shuford.

For the sake of argument, he compared the two tax rates set for residential and commercial properties. If the residential rate increases by 25 percent, commercial rates would increase by about 40 percent, causing an incredible increase in the monthly rent, he said.

Shuford said he “ran the numbers” for comparison and found that a $100 wheel tax would equal in revenues the same as either of the two original proposals – a levy of $2.50 or $2.30 plus a $50 wheel tax.

Instead, he proposed setting the wheel tax at $70 so that the budget could be balanced. However, the General Fund Balance would not see any additional dollars from this rate, meaning the funds in this particular line item would not be “replenished.”

“If we walk out of this courtroom tonight and we don’t come up with some way to address this issue, there’s no way to address it without there being a property tax increase,” said Shuford. “If we don’t do something, (the county is) going to be hurting. We either stick it to the property owners and hope for the best or come up with a way to find as fair a way as possible (to balance the budget).”

Commissioner Steve Brogan took exception to what he characterized as pressure to vote for such an important issue without first having access to the budget to review. Brogan is not a member of the budget committee.

“I’m not going to vote for a pig in a poke,” said Brogan. “To have the shortfall that we have this year in a county our size – it’s inexcusable. I’ll tell you one thing; I think we ought to cut our (the county commissioners’) pay – To let this get in this shape? I think we ought to cut our pay back to $150 a month.”

Commissioner Dennis Cook, who attended most of the budget meetings as a non-committee member, spoke of the way the state would handle a non-balanced budget if forced to take over management of the county. Cook got the information from the Community Technical Assistance Service.

“All the nonprofits would go. You wouldn’t have any fire department or senior citizens would go – anything that wasn’t absolutely necessary, they would cut out.

“We spent (in excess of) $1 million in COVID money last year to balance the budget. Really, this issue should have been addressed last year. But, it was an election year and nobody was going to address it.”

Cook said he asked the person he contacted at CTAS what it would take to get an extension past the Aug. 31 budget submission deadline.

“He said you got to have a very good excuse and an excuse that this commission won’t act and won’t do anything is no excuse for an extension,” said Cook.

The property wheel tax resolution was adopted on first reading with six opposing the measure. Those six were Commissioners Brogan, Gary Poore, Rosemary Barnett, Carolyn Brooks, Eric Jones and David Mundy.

Those in favor were Commissioners Shuford, Cook, Zachary Bunch, Nathan Epperson, Haley Barker, Mike Campbell, Stacey Crawford, Tim Shrout, Zach Mullins, Anthony Rowe, Mitchell Cosby, Steve Mason, Sherry McCreary, Quinton Rogers and Dustin Wilson.

It is unclear at this time if there will be any increase in the property tax rate this year if the county goes with the wheel tax. It was discussed but far from settled as to just when the wheel tax would go away.

The issue will be revisited by the Budget Committee on May 22, beginning at 6 p.m. inside the large courtroom of the Claiborne County Courthouse.

The second reading of the resolution is expected to be held during the June meeting of the commission, scheduled for June 20 due to the Juneteenth holiday.