Hawkins approves $40 wheel tax hike, but petition can make that null and void

Jeff Bobo • Jun 26, 2017 at 11:19 PM


ROGERSVILLE — First they shot down the $40 wheel tax increase during Monday's Hawkins County Commission meeting.

Then they voted to increase the property tax rate by 22 cents.

When it became apparent the property tax increase was going to pass, commissioners agreed to set the property tax increase aside and vote on the wheel tax again.

On the second try, the wheel tax was approved.

But it's far from final.

Now the Hawkins County Commission must wait 30 days to see if 1,095 registered Hawkins County voters, which is 10 percent of the Hawkins County voters who cast a ballot in the last gubernatorial election in 2014, sign a petition to require a special election referendum to let the county's voters decide the fate of the wheel tax increase.

It's not likely that a wheel tax referendum will come to a vote, even if a successful petition is submitted.

County Finance Director Nicole Buchanan told the commission during Monday's meeting she had been in contact with the state comptroller's office that day.

If the petition is successful, a special countywide election would have to be held within 75-90 days. As a result, Hawkins County wouldn't be generating revenue for as much as six months into the 2017-18 fiscal year.

The purpose of the tax increase was to eliminate a substantial revenue deficit, which at last report stood at $1.6 million. The state comptroller's office told the commission it must approve a balanced budget by July 1 or face a state takeover of the budget.

If the wheel tax stands and there is no referendum, the commission achieved that goal Monday night.

If there is a referendum, however, Buchanan said she was told by the comptroller that the 2017-18 budget is out of balance again, and the commission must approve a property tax increase by the end of August.

Monday's Hawkins County Commission meeting was described as "chaos" and "confusing" by some who watched live on the Times-News Facebook page. That video can be viewed on the Times-News Facebook page or the online version of the article.

In order to increase the wheel tax, state law requires that the commission achieve two consecutive two-thirds votes.

Last month, the commission voted 14-5 in favor of the $40 wheel tax increase, but on the first try Monday some of those who said yes in May changed their minds, including commissioners B.D. Cradic, Fred Castle and Mark Linkous.

When the wheel tax failed, Commissioner Stacy Vaughan, who chairs the Budget Committee, made a motion to amend the property tax resolution by increasing the rate 22 cents to $2.75.

Where the $40 wheel tax increase would generate about $2.1 million in new revenue, a 22 cent property tax increase would also balance the budget by generating about $2.2 million.

That motion only required a simple majority, or 11 votes, and was approved 12-8.

The wheel tax had been touted as the more fair mode to generate new revenue because it spreads the tax burden to more people, not just property owners.

For a residential property valued at $100,000, a 22 cent property tax hike would increase the annual bill by $55.

Before a vote was taken to approve the amended property tax rate, however, Commissioner Charlie Newton asked that the wheel tax vote be revisited.

On the second go-around, it was approved 15-5 with “no” votes being cast by Fred Castle, Dawson Fields, Rick Brewer, Charlie Newton and Mike Herrell.

The property tax was then approved at its current level, and the overall 2017-18 fiscal year budget approved, taking into account the new wheel tax revenue.

The commission also voted to restore all contributions to their 2016-17 levels and eliminate a 20 percent cut. Among the affected agencies are fire, EMS, rescue squads and the humane society. 

If there is no referendum, the wheel tax increase should be implemented by the first of August.

It will then cost $96 to tag a vehicle in Hawkins County. That will give Hawkins County the 10th highest wheel tax rate out of Tennessee’s 95 counties.                                        

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