Butte County moves forward with increasing wheel tax, mill levy

January, Butte County residents will notice an increase in their wheel tax when they pay their vehicle registration and a bump in the mill levy on their property taxes. The decision was prompted by the dire condition of county roads and bridges like Eichler Road Bridge, pictured here, closed in 2016 due to unsafe conditions. Pioneer file photo by Lacey Peterson

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BELLE FOURCHE –– With more than $12 million worth of road and bridge work needed within the next five years, the Butte County Commission held a special meeting Monday to iron out a plan to fund the repairs that have been piling up for years. 

“We’re in a crisis with our bridges, so we’ve got to figure out what we’re going to do to fund some of these,” Kim Richards, chairman, said.

Jason Hanson, with Brosz Engineering, the county’s contracted engineering firm, presented the commission a general outlook related to budgetary needs concerning the county’s roads and bridges and the lack of revenue sources to fund the improvements.

The plan delineates the county’s most dire bridges in need of repair or replacement within the next two-and-a-half years. In that time, if they county funded the necessary repairs with current financial condition and sources, it would be at a deficit of nearly $1 million by the end of 2021. Encompassed within the outlook are the estimated costs of the engineering, replacement, or improvised replacement with a culvert structure for eight Butte County bridges, in addition to gravel, chip seal for roads, and culvert replacements.

“So, (it’s) a very challenging budget, as you can see,” Hanson said.

So, Richards said, once Hanson laid out what the county needs to do, “now we need to figure out if it’s possible to pay for it or not.”

With the ever-increasing costs for the county’s judicial system and court-appointed attorney’s fees, in addition to other rising costs, Richards said the county is seeking a funding source that will be specifically pigeonholed for the highway department.  

“Basically our highway department is funded from wheel taxes, licensing, through the state ... and basically zero or very little is coming out of general fund for the highway department,” he said. “As time has gone on, other costs have gone up that we’ve had no choice but to pay (and) it seems like our highway department has gotten squeezed.” 

Wheel tax increase

Richards presented the commission with potential solutions. One idea was increasing the wheel tax, is a vehicle registration fee commonly charged to motorists based upon a vehicle’s weight and number of wheels.

Butte County originally implemented a wheel tax in 1988. Then, in 2017, the county augmented the wheel tax, bumping the charge from $2 per wheel for up to four wheels to $5 per wheel for up to two wheels.

State law allows for up to $5 per wheel with a 12-wheel maximum. The tax would be applied at the time of vehicle registration renewals. 

In 2018, the county collected $176,494.47 worth of wheel tax revenue that assisted in funding the county’s highway department. 

It still wasn’t enough help to the highway department, compelling the county to consider another increase.

Richards presented three different options for the increase, each charging vehicle owners differently. The first potential option would charge $3 per wheel for vehicles under 6,000 pounds or $5 per wheel for those over 6,000 pounds, each for up to four wheels. By Richards’ calculation, the option could net the county $282,504 per year, an increase of $97,464 from 2018 to go toward road and bridge repairs. 

With the second option, for vehicles under 6,000 pounds, residents would pay $3 per wheel for up to four wheels, and $5 per wheel for those over 6,000 pounds for up to 12 wheels. This would contribute to the county $395,428 per year, representing a $210,388 increase over 2018.

The third proposal considered charging $5 per wheel across the board for up to four wheels. This method would yield $362,720 per year, an increase of $177,680 above 2018.

The commission unanimously voted to move forward with the second proposal — $3 per wheel for vehicles under 6,000 pounds for up to four wheels, and $5 per wheel for vehicles over 6,000 pounds for up to 12 wheels. So, beginning January, a car, SUV, or small pickup truck will pay $12 per year toward wheel tax instead of $10. A larger four-wheeled truck would pay $20 per year, and so on, based on the vehicle’s weight and number of wheels.

This way, the commission hopes, the larger vehicles that cause the most damage to the roads and bridges will pay the most and help towards the costs of repair.

Mill levy increase

Next, the county discussed changing the mill levy to additionally help pay for needed repairs. 

The mill levy is the assessed property tax rate used by local governments and other jurisdictions to raise revenue in order to cover annual expenses. The mill levy is calculated by determining how much revenue each taxing jurisdiction will need for the upcoming year, then dividing that projection by the total value of the property within the area, and finally adding up the rate from each jurisdiction to get the mill levy for the entire area.

“This spring has been extremely tough on roads, and a lot of people have complained,” Richards said. “And the first thing out of their mouths is, ‘I pay all this money for taxes and I deserve good roads.’”

However, although a small amount of property taxes fund the highway department, “not the extent of, I think, what everybody believes,” Richards said. 

For budgeting purposes, Richards said, the county budgets approximately $76,000 from the general fund to the highway department in the form of supplementation after the year is complete.

“And we’re still working on those numbers more,” he said. “And I think that’s part of the puzzle (that we) need to make people aware (of).” 

Richards said that for the five years that he’s served on the county commission, the public “always got to use the excuse that we (the county) just don’t have any money (for proper road and bridge repairs).”

Now, the commission is taking another avenue, he said.

“Basically we’re saying that excuse isn’t good enough anymore,” Richards added. 

“We’ve got some hard choices but I think that we can’t just sit and say, ‘We don’t have any money. We’ve got to figure out a way to get through this.”

Commissioner Frank Walton said that seven months ago, the county supplemented almost $380,000 to the highway department to cover its expenses.

“And it looks like at the end of this year, we might be doing the same thing,” he said. “So somewhere around the line, we just don’t have enough coming in to do what we’re trying to do.”

Although Commissioner James Ager agreed, adding the county needs to find ways to slim down the budget in other areas.

“I just can’t vote to increase the burden on our taxpayers without making some cuts,” he said. “Not only are we increasing the (taxes) but we’re going to look at making significant cuts, too.”

Richards agreed.

“In my eyes, we cannot go on as we are; we’ve got to look at every department,” he said. “The increased funding is going specifically to projects and improvements. We’re not going to just be status quo anymore.” 

 Currently, county residents pay $3.961 tax per $1,000 of a property valuation. 

“The way the law is written, we can increase that mill levy up to 90 cents (on top of the current levy) to go strictly to the road and bridge maintenance fund,” Richards said. 

Currently, a Butte County resident owning property worth $100,000 pays $396.10 worth of mill levy tax as part of their property taxes. 

Ager said that because of the crossroad the county finds itself at, residents need to remember that additional taxation will affect the commissioners, too, not just the public.

“This isn’t like at the federal level where we’re implementing a bunch of tax or policies on (members of the) public that don’t affect us,” Ager said. “This is going to affect me ... could be up to $400-$500 a year on my little property. We’re all in this together.”

Ager suggested that, whatever the decision, the commission hold public meetings to allow county residents to hear details about the commission’s intentions related to the tax increases and ask questions of the commissioners.

The commission unanimously voted to approve an increase of 35 cents per $1,000 valuation, bringing the total mill levy to $4.311 per $1,000 valuation.

Beginning in January, a county resident owning property worth $100,000 will pay $431.10 toward the mill levy tax. With the increased tax, the county would yield an estimated $273,113 more to utilize for road and bridge repairs.

All five of the commissioners voiced concerns throughout Monday’s two-hour discussion about increasing taxes, but in the end, could find no other solution for the predicament the county finds itself in.  

The commission scheduled the first public meeting on the topic to be held at 6:30 p.m. on July 29 in the Butte County Courthouse courtroom.

Then, on July 30, the county will hold a meeting at 6:30 p.m. at the Newell Community Hall.

The county will hold second readings for the tax increases during its July 29 meeting. 

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