Evansville council weighs municipal wheel tax as state grant rules change

The Evansville Common Council discussed a proposed municipal wheel tax and how recent state legislative changes have reshaped local grant eligibility during its Aug. 11, 2025, meeting at Evansville City Hall. Council members, the city engineer and residents debated whether a new local vehicle registration surtax is necessary to secure road-repair grant dollars and to offset projected state revenue losses.

The discussion mattered because House Bill 1461 and related state actions have split the Community Crossings matching-grant program into two funding streams, council members and staff said, and one of those streams will be available only to municipalities that levy a local wheel tax. "We will, as a city, lose upward of $15,000,000 over the next three years," President J. Trotman said while outlining the administration's rationale for considering the tax. He also told the public the item would be on the council's next agenda for final action.

City Engineer Mike Lubitsky told the council the state has moved much of the grant funding into a "secondary bucket" that requires a municipal wheel tax to access. Lubitsky said Evansville received a $1.5 million Community Crossings award the last two years but that the legislature has reduced the primary pool from roughly $400 million to $100 million and placed about $160 million into the new wheel-tax-only bucket. "That bucket is significant," Lubitsky said, adding that based on Evansville's lane miles the city could be eligible for "anywhere from $2 million to $3 million in fiscal year 2027."

Residents and advocacy speakers voiced concerns about fairness and affordability. Michael Kania, who said he registers three vehicles, called the proposal regressive and suggested a percentage-based fee or exemptions for veterans. Christopher Norr, speaking for Direct Action Against CenterPoint Energy (DACE), raised related concerns about utility-bill increases and the possible effects of HB 1461 on township trustees who provide utility-relief assistance.

Council members and staff answered technical and policy questions from the audience. Councilman Green and others said state statute and the State Board of Accounts set caps and exemptions for how a wheel tax may be structured and what projects the money may fund. Council members noted that prior Community Crossings awards required local matches (previously 50 percent, reduced to 20 percent in statute revisions) and that paving costs remain high; one council member cited an estimated $300,000 per mile as a rough planning figure for resurfacing.

The meeting also produced several routine formal actions. On motions taken during the session, the council adopted the consent agenda (which listed three items including an ordinance described as imposing a municipal wheel tax), approved an amendment to the city travel-advancement policy and tabled an appropriations ordinance until Aug. 25. Later in the meeting President Trotman told the public that the "wheel tax" item presented that evening was a first reading and that the council would vote on it at the next meeting, a point that follows the public comment and staff briefing.

Votes at a glance: The council adopted the consent agenda, which the clerk described as containing Ordinance G-20-25-17 (an ordinance imposing a municipal wheel tax and motor vehicle license excise surtax fund), Ordinance G-20-25-18 (an amendment to chapter 6.05 of the municipal code) and Resolution R-20-25-24 (rezoning of property commonly known as 33220 Bridal Hart Avenue). The consent agenda passed with the council's vote (all present voting aye). The council adopted Ordinance G-20-25-16 (amending travel/advance rules to allow travel advances and per diem procedures) on a roll call vote of nine ayes, zero nays. Ordinance F-20-25-10 (transfers and additional appropriations) was tabled to the Aug. 25 meeting after the council said the required advertisement was missed.

The council invited written follow-up questions to citycouncil@evansville.in.gov and the meeting record includes materials the administration filed describing the grant and lane-mile calculations. President Trotman said packets left with council members included the detailed numbers referenced during the discussion and that the wheel-tax item will return for final action at the next scheduled meeting on Aug. 25.