Huntingburg Council introduces wheel tax ordinance to unlock up to $1 million in road funding

Facing a new state mandate that ties road-funding eligibility to local vehicle taxes, the Huntingburg Common Council introduced a wheel tax ordinance this week to unlock up to $1 million in Community Crossings grant funding.

Mayor Neil Elkins presented the ordinance as a necessary step to meet a state requirement, with the deadline to certify the ordinance to the Bureau of Motor Vehicles and the Department of Revenue set for Sept. 1, 2026.

“It isn’t our intent to raise people’s taxes,” Mayor Elkins said. “The intent is to make us eligible for Community Crossings.”

A pair of recent state laws set this in motion. House Enrolled Act 1461, passed in 2025, tied Community Crossings Matching Grant eligibility to whether a community has adopted both a wheel tax and a vehicle excise surtax, while also cutting the program’s annual funding and moving it to a single yearly award cycle rather than two. Senate Enrolled Act 179, passed in 2026, added further pressure by tying any county-level wheel tax increase to also needing an approved vehicle excise tax. Together, the laws have pushed cities and towns across Indiana to adopt or update local wheel taxes simply to stay in the running for state road money.

This past year, the city applied for $930,000 in Community Crossings funds and received $171,000. With a wheel tax in place, the city can apply for up to $1 million in supplemental funding in June, in addition to its standard annual application.

“Just about every county around us got the maximum $1 million when they applied for it,” Mayor Elkins said. “Cities didn’t.”

City Attorney Phil Schneider explained that the ordinance would establish two separate local option highway user taxes. The first is a wheel tax targeting larger vehicles — including buses, recreational vehicles, semi-tractors, semi-trailers, and heavy commercial vehicles — set at $35. The second is a municipal vehicle license excise tax applying to passenger vehicles, smaller trucks, smaller trailers, and motorcycles.

Under the proposed rates, passenger vehicles and smaller trucks with a declared gross weight under 11,000 pounds, along with trailers under 9,000 pounds, would be subject to a $25 flat fee. Motorcycles and motor-driven cycles would be taxed at $15.

Schneider noted that the municipal tax rates are consistent with other communities in the area. “The statute allows municipalities to charge between $5 and $40 on those vehicles,” he said, referring to the larger vehicle category. “This ordinance is consistent with other communities in the area that are charging $35.”

A key point of discussion among council members was whether residents would see an increase in their total registration costs. Schneider clarified that the municipal tax does not stack on top of the existing county wheel tax — instead, the city’s portion comes out of what the county currently collects.

The council questioned whether this new tax would stack on top of what already exists in the county.

“My husband has a Dodge Ram truck that’s [old], and that is $87 to register it. But if we have this on it, it’s going to be $25 plus the $87. I mean, that’s significant,” said Councilwoman Pam Bolte. “I think that’s going to be a big jump for some people.”

Schneider responded that residents are already paying a comparable amount through the county’s existing wheel tax and excise fee — the ordinance simply shifts where that money goes, rather than adding to it.

“The county’s portion would be reduced by $25, and that $25 would come to the city,” Schneider said as an example.

Elkins added that the anti-stacking provision was something built into the legislation. “That was one of the things that they did to get the legislation through — that they did away with stacking, you know, where cities and counties stacked a tax on top of a tax,” he said. “So that stacking has gone away, so it comes out of their portion.”

The council agreed that if the taxes wouldn’t cummulatively increase, they could support the ordinance in light of the connection to the grant funding.

“The way it sounds, we have no choice if we want to continue to get Community Crossings, or at least larger portions of Community Crossings,” Councilman Glen Kissling said.

Elkins echoed that stating the state has basically stated the wheel tax is the city’s “skin in the game” — the state’s way of ensuring municipalities have a financial stake in road maintenance before accessing grant dollars.

The city estimates the tax would generate approximately $80,000 in annual revenue. By comparison, the nearby city of Jasper is projecting around $180,000 from its own wheel tax, according to Elkins.

Vehicles registered to the state of Indiana, state agencies, political subdivisions, religious nonprofit organizations, youth organizations, school buses, and vehicles used in funeral services are exempt from the tax.

The council voted to introduce the ordinance on first reading rather than suspending the rules to pass it immediately, opting instead to hold it over for final adoption at the Aug. 25, 2026, meeting. That approach allows time for public awareness before the vote, with the certified ordinance needing to reach state agencies by Sept. 1, 2026.

“That would only give us, of course, five days or so to get certified copies to the Bureau of Motor Vehicles and the Department of Revenue,” Schneider said, “but I’m sure that can be done.”

The motion to introduce the ordinance passed with unanimous support from the council members present.

Mayor Elkins noted that the city’s share of county wheel tax collections has historically been modest. “We ended up with 6.4% of the county allotment,” he said. “This will get us a little higher than that.”

The new ordinance, if adopted on Aug. 25, 2026, would position the city to apply for its standard Community Crossings allocation next month and then pursue the supplemental up-to-$1 million grant in June, pending eligibility confirmation based on lane mileage calculations.

The council also took the following actions:

Approved extending the timeframe for a homeowner to find rehome two dogs to be in compliance with the city’s animal ordinance. The owners are having difficulty finding a new home for the dogs because of their size, both are Great Pyrenees. The Dubois County Humane Society has also been contacted to help rehome the dogs but has not been successful yet. Though the humane society is involved, the family has continued to foster them through the organization’s foster program until they can be adopted. The homeowner asked for 60 days but the council agreed to align the time up with the meeting closest to the 60-day request (62 days) for the October 13 council meeting. The council asked for an update by September 14.

Heard from a resident asking about meeting announcements, agendas and minutes being on the city website. She said that committees and boards like the Plan Commission and Economic Development Commission didn’t have information on the city’s website that was current nor did the most recent meeting minutes from the council appear on the website.

The council explained that the minutes are published after they are approved at the subsequent meeting and signed. Once that is accomplished, they are published on the website. Mayor Elkins said they don’t put any minutes up until they are approved but noted that if a committee only meets as needed, that could impact the process. “There might be two or three months before those minutes become official,” Elkins said.

Schneider clarified the city is not required to post minutes online and the public can request them directly.

Based on the resident’s comments, Councilman Bounds stated the city should ensure minutes and agendas are on the website consistently. He said that the city is doing better than it was when he was first elected over nine years ago.

“I don’t think anybody can say we are trying to withhold information from the public,” he said. “But I do thing there’s an expectation in the community that what we do stays above board and they have access to all this information. I would argue that we do our best to keep it out there in the public eye.”

Elkins said the city is transitioning into the new website which will be easier for visitors to navigate to find information.

On a final note, Councilman McPherron questioned whether utility bills were mailed late. He said he had had several complaints. Other members of the council, the mayor and city attorney all discussed the trouble they have had receiving mail due to delays with the U.S. Postal Service. “I had a certified letter that was mailed in April, just received it last week,” Schneider said.