Motor Vehicle Privilege Tax Going To Referendum

Huntsville, TN (2011-11-21) The Scott County Commission voted Monday night to get the wheels rolling on a Motor Vehicle Privilege Tax for county residents. An up or down vote on the issue will be placed on a public referendum in March.

With the County increasingly buried under a mountain of debt, the County Commission has been searching for new revenue to help balance the budget. To that end, the Board agreed Monday night to place a Motor Vehicle Privilege Tax, popularly known as a Wheel Tax, on a public referendum to allow voters to decide whether or not to self-impose a tax on each registered motor-driven vehicle owned by a Scott County resident.

The resolution calls for a $30 fee to be collected on all vehicles licensed for public roads, including personal, commercial, and antique vehicles, with the exception of certain farm vehicles, government vehicles, and those vehicles exempted by general law, including former POWs and veterans with 100% service related disabilities. The levy would be collected by the County Clerk at the same time as the annual vehicle registration. Drivers would be issued a decal that will be affixed to the license plate as proof the tax has been paid.

All proceeds from the tax would go to amortize the debt associated with the construction of Robbins Elementary School, Burchfield Elementary School, and the Oneida Schools. Once the debt from those projects has been retired, the Wheel Tax would be allowed to expire.

While Commissioners seemingly acknowledged that something had to be done to raise revenues, there was some concern that the new tax would not be enough to cover the payments on the school debt. Budget Committee Chairman Willie Boyatt pointed out that with the inclusion of commercial and other types of vehicles, there would be an estimated 21,095 eligible vehicles in Scott County. “If we assume an 80 percent collection rate, that would generate $480,966,” Boyatt said. With numbers provided by Finance Director Carol Lowe, Commissioner Paul Strunk pointed out that payments on that debt in 2010 were over $472,000. While that was the actual payment made last year, the state currently requires the county, since the bond is based on a variable rate, to budget the issue at an interest rate of three percent. “At three percent, the payments would be nearly $720,000. At 5%, it would be over $989,000,” Strunk stated.

The controversy over the amount of levy needed to close the hole in the budget caused more than a little consternation. “Here at the eleventh hour, now you’re coming to us and saying (thirty dollars) might not be enough?” said Commissioner Sam Lyles. Boyatt replied that the Budget Committee had discussed the tax, but it was County Mayor Jeff Tibbals who had set the rate. “You guys are the decision makers here. I know this has been thrown (out) as a “Mayor Tibbals’ thing, but it isn’t,” Tibbals retorted. Should the Wheel tax not be enough to fill the budget gap, Tibbals stated that he would look at laying off county employees before he would recommend a further property tax increase. “The people of this county did so to have me run this county like a business, and anyone that did that would cut expenses if they didn’t have the revenue,” Tibbals stated.

With a unanimous 14-0 vote, the Commission agreed to pass the enacting resolution; however, before the levy will become law, the measure will be placed on a public referendum during the Presidential Preference Primary on March 6, 2012. Voters will be asked simply to vote for or against the question. The issue will require a majority vote of the public before it can be implemented. If the issue passes in March, the county would begin collecting the tax in April 2012.