Jefferson County Council opens public hearing on proposed vehicle excise surtax and wheel tax

The Jefferson County Council opened a public hearing on a proposed ordinance to impose a county motor vehicle excise surtax and a county wheel tax, saying the taxes would begin Jan. 1, 2026, and aim to raise revenue for road, bridge and maintenance work and to qualify the county for state matching grants. The ordinance text cited Indiana Code sections authorizing counties to impose an excise surtax and a wheel tax and would create two nonreverting funds into which revenues collected by the Bureau of Motor Vehicles would be deposited.

The ordinance as read sets the minimum rates the council is considering at $7.50 annually on traditional passenger vehicles, motorcycles and most collector vehicles and $5 annually on certain larger vehicles such as buses, recreational vehicles, trailers with gross weight above 9,000 pounds and trucks/tractors above 11,000 pounds; state law allows higher maximum rates (the ordinance cites maximums of up to $25 for the surtax and up to $40 for the wheel tax). The ordinance text directs the treasurer to provide the council, on or before Oct. 1 each year, an estimate of surtax revenues to be included in the county budget and directs the treasurer to file the ordinance with the Bureau of Motor Vehicles and the Indiana Department of Revenue as required by statute.

Residents who spoke at the hearing expressed a mix of support and concern. Some speakers said the county needs a stable revenue stream to maintain roads and bridges and to remain competitive for Community Crossings and other state grants; one commenter noted recent flood damage and the high cost of bridge replacement estimates. Others questioned fairness for city residents if both the City of Madison and the county adopt taxes that apply to the same vehicles and urged state lawmakers to remove language that allows the two jurisdictionstaxes to stack. A speaker identified as the council member for District 3 said the council does not want city residents to bear an added tax burden and described ongoing outreach to state representatives to seek change to the stacking provision.

Council staff and residents clarified several implementation details during questions: collections would be processed through the Bureau of Motor Vehicles at registration renewal; revenues would be distributed to incorporated units under the statutory formula (the ordinance and staff comments gave example distributions under the minimum-rate scenario, including a quoted figure that Madison would receive $43,009.68 on the minimum scenario); the countys transportation asset management (TAM) plan has been approved; and Community Crossings grant eligibility and grant maximums differ if a county adopts a wheel tax. Council staff said that some grant programs effectively prioritize or require a local wheel tax for larger allocations and cited prior Community Crossings awards ranging from several hundred thousand dollars up to about $1.5 million in recent years.

No formal vote on the ordinance occurred at the hearing. The council opened public comment, allowed multiple speakers, and scheduled further council action: the council said it would reconvene at 5:30 p.m. on Thursday to read the ordinance again and then vote. A motion to adjourn was made and seconded at the end of the meeting and was acknowledged as moved.

The hearing included repeated concerns about equity for seniors and low-income residents, the timing required by state law for revenues and eligibility (the ordinance and staff said collections would begin in 2026 if adopted), and unresolved technical questions such as how commercial/IRP-plate vehicles or multi-year plates would be handled; staff said they would verify those points with the BMV. The council encouraged residents to contact state legislators about the potential stacking provision and said council members had already been contacting state decisionmakers.