MOORESVILLE — Morgan County residents in Mooresville and Martinsville could soon have to pay more when they renew their license plates or register a car if the local governments pass a local option highway user tax (LOHUT), commonly referred to as a wheel tax.
“That’s the wheel tax and the excise tax,” town attorney Chou-il Lee said during the Mooresville Town Council’s July 21 meeting, adding that a wheel tax is for personal vehicles while the excise tax is for larger vehicles.
According to Lee, in order for the town to qualify for Community Crossings grant money from the state in the future, Mooresville “will have to have enacted a … LOHUT.”
“The dollars that you’re getting to operate your community, and to basically keep your roads up to snuff, is becoming less and less and they’re making you, what they’re calling it at the Statehouse, ‘Having skin in the game,’” Lee said.
He noted that several nearby communities have enacted a LOHUT.
Lee said he believes the council needs to have a discussion on whether it wants to consider a highway user tax.
Based on some of the recent news coverage for other communities that have enacted similar taxes, council president Tom Warthen said residents in those municipalities have become “really upset … for adopting these.”
“But the bottom line is that we’re being mad at the wrong people,” Warthen added. “Chou-il had a really good point there — they have shifted the burden of collection. Now they are going to tell us that, ‘OK, you’re not going to get your full levy because we want to … give some property tax relief.’”
In Warthen’s opinion, the state is not saying that local governments will spend less money.
“What they’re saying is ‘We’re going to make the local governments collect money in a different fashion,’” Warthen said, adding that the council would have to make some hard choices moving forward.
The town, according to Warthen, usually receives anywhere from $600,000 to nearly $1 million in funding from the Community Crossings program.
This year, for example, the town received just under $800,000 in funding from the program.
“And that’s going to go away, we’re not going to get that 75-percent match if we don’t put skin in the game, if we don’t say, ‘Yeah, we’re going to collect that,’” Warthen said. “The displeasure, the animosity, the anger is going to be directed at this board. Because we are going to be the ones that have to say, ‘Yes, we’re going to try to keep the town solvent by collecting funds in a different manner.’”
According to Warthen, the town has “played by the rules” for as long as he’s been on the council, and even before his tenure on the board.
“They’re making the rules a moving target,” he added.
Warthen went on to say that, as it stands now, the town will have to cut $800,000 from its budget in 2029.
“We’re going to get by,” Warthen noted. “But it’s going to come to the point that we have to cut services.”
Martinsville Mayor Kenny Costin was also present at last week’s meeting and noted that the city has already started working on a new wheel tax.
“All the great things that (Mooresville) have done the last five or six years, the things that we have done in Martinsville, will be forgotten when we have to put in a true local income tax to fund everything,” Costin said. “(Raising taxes is) put back down at the local level, and we’re the ones that are going to get the blame for everything.”
Costin used his time at the podium to encourage the Mooresville Town Council to educate residents on the importance of the tax, and to lay blame with the state for necessitating the tax.
“We need to start telling our story and getting out ahead of it that, ‘Hey, this isn’t us,’” Costin said. “This is coming down from the state, who had a billion dollars excess funds that they were kind of shouting about, and yet they expect us to keep cutting and cutting and giving them more service.
“We’re not the only county that’s in this predicament,” Costin continued. “We’re not the only communities in it, but we’ve got to work together to make sure we get out of it.”
At the end of the council meeting, Warthen continued the tax discussion, agreeing with Costin about the need to inform residents of why the tax is needed and blaming the state for causing a problem.
“I think we’ll survive with no problem, but it’s still going to be some things that we’re going to have to have some thick skin and we’re going to have to say, ‘This is how it works,’” Warthen said. “We’re going to have to educate the public. We have to make sure the public knows that, yes, you can come in here and beat this council up. Local government is the most accessible government in the world.
“People can come in here and say what they want to say, but it goes up a step from us because we are merely pawns playing by the rules,” Warthen concluded.
