Michigan City mayor outlines wheel, excise tax plan to shore up road funding as state law changes take effect

Mayor Angie told a Michigan City Common Council workshop on Aug. 18 that the city will bring a combined wheel and excise tax ordinance back for second and third readings the next day and urged the council to act before Sept. 1 so the city can qualify for new state road funding created by recent legislation. “I know that we have second reading tomorrow on, the wheel tax,” the mayor said, adding the rule changes make the measure time‑sensitive.

The discussion centered on two recent laws the city said will reduce some local revenues while creating a new lane‑mile direct distribution that is available only to municipalities that adopt a local wheel tax. City officials described the changes as follows: Senate Enrolled Act 1 will produce multi‑year reductions in property‑tax–based revenue beginning in 2026 and grow to a projected $3.7 million shortfall for Michigan City in 2028; House Enrolled Act 1461 creates a lane‑mile direct distribution tied to the number of lane miles in a jurisdiction and requires adoption of a local wheel tax to receive those funds.

Why it matters: city officials said Michigan City has relied heavily on riverboat revenue and one‑time federal funds and is now facing structural shortfalls and declining reserves. The mayor described the city’s riverboat receipts at a historic high of about $26 million in 2014 and a COVID low near $6.8 million, with a recent average of roughly $8 million. “We have been living off of riverboat money,” the mayor said, and warned that cash reserves were largely spent down in prior years.

City staff and outside…