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Consultants outline wheel tax and excise surtax options; council hears revenue projections
Summary
Consultants and staff briefed the council on local adoption of a wheel tax and excise surtax, explaining rate ranges, adoption timelines to qualify for lane‑mile distributions, exemptions, and a projected increase of roughly $210,000 in city receipts if Frankfort adopts its own rates.
Consultants from REI briefed the Frankfort Common Council on local‑option highway user taxes — the wheel tax and an excise surtax — and how adopting city rates could increase local road funding without raising net costs for taxpayers.
REI explained the wheel tax can range from $5 to $40 and the excise surtax from $7.50 to $25, and emphasized a taxpayer pays either the wheel tax or the excise surtax for a vehicle, not both. The consultants said Frankfort currently receives about $182,000 under the county distribution; if the city adopts its own rates the same vehicles would be taxed at city rates and REI projected city receipts of roughly $392,000 (about $210,000 more) while noting that total taxpayer bills would not increase, only the allocation of existing vehicle fees.
Consultants also outlined administrative steps and deadlines: the ordinance must be adopted and filings completed by Sept. 1 to be effective Jan. 1, and adopting local rates is a prerequisite for eligibility for certain lane‑mile direct distributions tied to the state program. Council members expressed support for pursuing adoption with staff guidance and requested draft ordinances and scheduling for first reading in July so the process can complete before the Sept. 1 deadline.
Quote: A REI presenter clarified the mechanics, saying, “It’s per vehicle registration, not per wheel.”
Next steps: Staff will circulate the draft ordinance for council review, plan for first reading in July and aim to complete readings before Sept. 1 if council directs the ordinance forward.
