The Michigan City Common Council voted unanimously Tuesday to impose a municipal motor-vehicle license excise surtax and a municipal wheel tax as the city moves to replace shrinking state and riverboat revenues for street maintenance.

Mayor Angie, outlining the fiscal context during an extended presentation, said the city expects to receive “about $8,000,000” in riverboat funds this year and warned that amount has declined from historic highs. She said the change in state law and other shifts mean the city must find new, local revenue streams to maintain services.

The ordinance adopted on third reading sets the passenger-vehicle excise surcharge at levels allowed by state law (the presentation described a maximum of $25 per passenger vehicle) and sets a separate wheel tax for commercial vehicles (a maximum of $40 was cited). The mayor’s staff provided a revenue estimate in the materials distributed at the meeting showing an estimated maximum annual yield of $638,783 and a minimum of $183,688, depending on the rates the council adopts.

The council also approved suspending rules to consider second and third readings the same night. Councilman Bryant Dabney moved to suspend the rules; the motion was seconded by Councilwoman Tillman and passed on a 9-0 roll call. The final motion to adopt the ordinance was made by Dabney and seconded by Dr. Cora; the ordinance passed 9-0.

Why it matters: state legislation known in the meeting as Senate Enrolled Act 1 and other recent changes reduce certain revenue streams and alter how road funds flow to municipalities. City officials told the council some state road-distribution changes will unlock an additional “lane-mile direct distribution” in 2027, but only if a municipality adopts both the excise and wheel taxes. The mayor said that lane-mile money is not available until 2027 and that adopting both local taxes now is required to become eligible for that later distribution.

Council members emphasized the practical use of the revenue. Councilwoman Moldenhauer said constituents repeatedly report potholes and failing pavement and that the tax would capture funds the city previously left on the table. Councilman Przybylinski and others argued for adopting higher rates to maximize revenue now rather than returning later for increases.

What the city will do with the money: city leaders said the revenue will reduce the amount the city currently supplements from riverboat funds for routine street work and for matching state grants such as the Community Crossings Matching Grant (CCMG). Officials also discussed the possibility of purchasing paving equipment to allow more in-house street repairs, rather than relying solely on contracted work.

Public reaction: speakers at the public-comment period were split. Some residents pressed for the highest rates to preserve infrastructure; others urged the council to consider lower rates to reduce the burden on low-income and retired residents. Several commenters noted that alternative fees already apply to electric and hybrid vehicles at state vehicle registration.

Discussion vs. formal action: the presentation and public comment were extensive; the formal action was the three-reading adoption of the excise and wheel tax ordinance and the suspension of rules to permit immediate enactment. No temporary exemptions or staggered implementation were authorized at the meeting.

Ending: With the ordinance now law, the city will collect the surtax and wheel tax through the motor-vehicle licensing process; city staff and the mayor said they will return with implementation details and that an additional lane-mile distribution from the state is expected to begin in 2027 if the city maintains both taxes.