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TO: |
Roger L. Stancil, Town Manager |
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FROM: |
Kenneth C. Pennoyer, Director of
Business Management |
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SUBJECT: |
Increase in Town Motor Vehicle Tax |
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DATE: |
February 23, 2009 |
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REISSUED: |
March 9, 2009 |
Enactment of the attached ordinance would increase the Town motor vehicle tax from $20 to $30 effective for tax bills distributed in June of 2009.
Increasing the motor vehicle tax was part of the Town’s legislative agenda for consideration by the General Assembly in 2008. The motor vehicle tax is assessed on vehicles registered in the jurisdiction levying the tax. The County collects the tax and bills registered vehicle owners on their annual motor vehicle property tax bills. The Statute governing the motor vehicle tax requires that amounts in excess of $15 per vehicle must be used for public transportation. Currently, the Town’s $20 motor vehicle tax is split between the general fund and the transportation fund with the general fund receiving the first $15 and the transit fund receiving the remaining $5. The amounts budgeted for FY2008-09 are as follows:
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FY2008-09 BUDGET |
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General Fund ($15) |
$ 424,000 |
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Transit Fund ($5) |
140,000 |
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Total |
$ 564,000 |
Session Law 2008-16, ratified on June 25, 2008 authorized an additional $10 per vehicle annual registration tax for the Town, allowing the Town to increase its motor vehicle tax from $20 to $30. Due to the provision of the statute requiring amounts in excess of $15 per vehicle must be used for public transportation; all of the additional $10 increase will go to the transit fund. There is an approximately three month lag before the new fee can be incorporated into the vehicle property tax bills. If the ordinance is enacted this evening the first bills reflecting the $30 fee will be sent in June with the Town receiving the first additional revenues in July of 2009.
The estimated budget impact of implementing the additional $10 of motor vehicle tax will be an increase of approximately $282,000 in the Transit Fund for FY2009-10. The proposed increase in the motor vehicle tax will help off-set the anticipated loss of State and Federal funding in next year’s budget. Current budget estimates project that State Transit Assistance revenues for FY 2009-10 will fall by as much as $600,000 based on NC DOT estimates. Staff will request appropriation of these funds as part of the Council’s adoption of the FY2009-10 Transit Fund Budget.
Staff recommends that the Council enact the attached ordinance increasing the Town’s motor vehicle tax from $20 to $30.