After spinning in its tracks and then stalling, a proposed $15 vehicle tax in Mount Airy was revved up again during a budget discussion Wednesday, and its route is now uncertain.
When the city commissioners first arrived for a budget workshop at City Hall, it was clear the majority were not in favor of the new tax, which state law allows municipalities to begin levying on July 1 at a maximum of $30 on every registered vehicle.
The $15 proposed for Mount Airy would apply not only to cars and trucks, but campers, trailers and other conveyances — “anything with a tag,” as explained by one city official.
Last year, the city collected regular property taxes on 10,700 vehicles, according to Finance Director Pam Stone. The new tax would generate $160,500 based on that figure — roughly matching Mount Airy’s population — with $10 of the $15 to be used for local street needs and the rest for any purposes local officials deem.
Commissioner Dean Brown, in expressing opposition to the new tax Wednesday, said he had received more telephone calls on that issue than any other in the proposed city budget for 2016-2017. It also calls for a 4-percent hike in water and sewer rates.
“That’s a lot of money to some,” Brown said of the $15. He cited the financial impact on businesses with fleets of registered vehicles, along with individual owners.
“There are people who own old cars,” Brown said of another segment affected disproportionately, folks who aren’t necessarily rich despite their investments in restoring those vehicles.
Another council member was adamant about the effect the $15 tax would have on him specifically.
“I want to go on record right now that all my vehicles and trailers are for sale,” Commissioner Jon Cawley said jokingly. “At my house this one tax alone will cost me $135.”
Commissioner Jim Armbrister, in also expressing opposition to the new tax, commented on how much it already costs to operate a vehicle, such as tag, inspection, insurance and other expenses. That would rise even more come July 1 when the new fiscal year begins and the vehicle tax, if approved, would go into effect.
Armbrister said he does not believe the tax is “justifiable” in the upcoming budget, although he could see a need for it in the future. “This year I’m saying no.”
Commissioner Shirley Brinkley also said she had received “many, many emails” from citizens about the vehicle tax.
“I’m not in favor of it,” she said during Wednesday’s budget workshop, citing concern for local residents on fixed incomes.
“This is going to pull a lot of money out of their pockets,” she said of the impact of the tax overall. “I just feel like we don’t need to ask for this right now — I think $15 is painful, I really do.”
The only one of the five commissioners who seemed to favor the new tax at all was Steve Yokeley, and he did so with reservations.
“If we do enact it,” Yokeley said, “I think we need to tell people exactly what needs to be done (with the funds).”
The $10 portion of the levy generally would be used for maintaining, repairing, construction, reconstruction, widening or improvement of public streets that are not part of the state highway system.
Specific street needs should be spelled out, Yokeley said.
He also is concerned that state government allocations now targeted for streets might disappear.
In 2015, the Legislature repealed a longtime formula that linked Powell Bill funds for street needs to the gasoline tax. Street allocations are now part of yearly state budget appropriations of about the same sums, the finance director said.
Yokeley thinks enacting the new $15 tax at least would allow the city a revenue source to fall back on if the state allocations end.
While the vehicle tax at first appeared headed to the junkyard on Wednesday, such concerns about future revenue seemed to cause the commissioners to detour from their initial positions.
Faced with another proposal in the budget, to increase personnel costs by 8 percent to provide raises for municipal employees — amounting to about $800,000 for 2016-2017 and continuing from then on — officials shifted the tone of Wednesday’s discussion to revenue worries.
Given that $3.1 million is projected to be taken from the city’s reserve fund to balance next year’s budget, Cawley and other commissioners pointed out that salary and other expenses are not sustainable under the present revenue structure. And dipping into the reserve fund will deplete it over time, they said.
This led to a discussion about possibly raising property taxes for next year — which is not on the table now — and also implementing the vehicle tax, just to provide more revenue.
Or the vehicle tax could be imposed at a lesser rate, with Commissioner Brown suggesting $5 rather than $15.
However, Wednesday’s budget session ended with no firm decision on the budget, or the proposed vehicle tax., with officials scratching their heads for answers.
They will resume their discussion when the budget workshop reconvenes Monday morning.
Tom Joyce may be reached at 336-415-4693 or on Twitter @Me_Reporter.