Greenwood council introduces municipal wheel tax ordinance to preserve Community Crossings grant eligibility

The Greenwood City Council on a regular meeting introduced Ordinance 25‑09, establishing a municipal wheel tax and a motor vehicle license excise tax so Greenwood can remain eligible for Community Crossings grant matching funds created under a pending state measure, House Bill 1461.

The measure, sponsored by the full council and presented by Wright, a city staff member, would replace the county-administered wheel tax revenue within Greenwood with a municipal version so the city retains receipts for road-matching projects rather than those dollars being split across Johnson County. "The impetus for this municipal bill tax is coming out of House Bill 1461," Wright said, adding the municipal option is intended to preserve local eligibility for Community Crossings grants.

Why it matters: Greenwood staff said the city currently receives about $1.4 million per year from the county-administered formula and estimates the municipal version could generate about $1.9 million annually for Greenwood, based on comparisons with similarly sized municipalities. Greenwood officials said the community has used those funds for major road projects, including nearly $3.0 million of work planned this year in the Country Aire subdivision. Council members and staff stressed the ordinance is intended to reallocate, not add, tax burden: "We're not adding a new tax," Wright said. "It will just be separating it from the county... It is not a net new tax to citizens."

Key timing and legal points: Wright told the council the state bill specifies a June 30 adoption date to be eligible for the next round of Community Crossings grants; staff also said the municipal tax would not take effect until the statutory collection start date (staff cited a likely effective date of Jan. 1, 2026, to allow required notifications and collection arrangements). Council members noted that the state measure also makes the municipal tax "unstacked" with county rates so municipalities retain revenue from vehicles registered within their boundaries and counties collect from areas not covered by a municipal tax.

Definitions and scope: Council discussion clarified that the proposed ordinance contains two related charges commonly called a wheel tax (covering commercial and some heavier vehicles, recreational vehicles and trailers) and an excise (surtax) that applies to passenger vehicles; state statute requires adopting both together. Council members and staff repeatedly said statutory definitions determine which vehicles qualify and that the city could not unilaterally narrow those classes beyond the state definitions. Wright cited examples from the draft: certain utility trailers and recreational vehicles that have BMV registration would be captured, and some fees discussed in the meeting were described as low (one example figure mentioned by a speaker was $25 for a certain category), but the ordinance text and final rates remain to be confirmed in later readings.

Public comment and questions: Greenwood resident Randy Gooden asked for clarity on how "recreational vehicles" are defined in the ordinance and whether small pop-up campers would be captured. "When you list recreational vehicles, do not state if there's a gross tie in to our what that implies," Gooden said, expressing concern that the wording could sweep in small campers. City staff answered that statutory definitions govern qualification and that the ordinance will follow those definitions; staff did not provide a narrower local exclusion at the meeting.

Next steps: Ordinance 25‑09 was formally introduced; council members discussed scheduling a future reading and possible adoption before the June 30 deadline for grant eligibility but made no final vote on adoption at the March meeting. Council members indicated they could delay final action until the state bill's passage if necessary. Councilors also emphasized the measure had broad council sponsorship (the draft was presented as sponsored by the entire council).

Ending: Council members did not adopt final rates or an effective date at the introduction. Staff said they will return with the ordinance for subsequent readings and that the city will seek to finalize technical definitions and collection mechanics in follow-up meetings.