by Barry Henderson
If you think the annual auto license tag renewal fee ought to be higher for Knox Countians than $24, read on.
The current fee is absurdly low. It's $18 below the average among all counties in Tennessee, a state with total license plate fees and taxes that fall among the nation's lowest.
All manner of praise was heaped on Knox County Clerk Mike Padgett and his staff for the efficient, service-oriented operation of his office, which collects tag renewals, to help justify an increase of $6 a year as laid out in an ordinance that passed County Commission nearly unanimously on first reading Tuesday.
Though true, such justification was hardly necessary, even though the clerk's office stands to get a small percentage that will give it its first additional processing fee in 11 years. An increase was simply required by common sense and fiscal necessity. The 18 aye-voting Knox County Commissioners are to be commended for voting to increase the fee here by adding a local motor vehicle privilege tax as allowed by state law. It could have, and should have, been much higher, but we'll take what we can get—for starters.
The only commissioner to vote against the ordinance was Mike McMillan, who was arguing about the distribution of the proceeds of a $6 annual increase. The commissioner who moved to amend the change to take the fee higher, by at least $10, was Wanda Moody. She, too, wanted more of the net proceeds for teacher pay raises from the increase, which is to be divided evenly between Knox County Schools and the Knox County Sheriff's office, a split that's biased against the much larger school system.
When the Commission considers the ordinance again, it would behoove its members to take the division of proceeds more seriously. Sheriff's deputies may well deserve pay raises, and the sheriff is complaining that he's losing officers to better paying jurisdictions. But so are teachers leaving to get better compensation elsewhere, and there are a lot more of them here who are deserving of a fairer shake, if that's the way the wheel tax is to be spent.
Dickering over who gets what aside, the $6 hike is chewing-gum change, producing only about $3 million in added revenues from the new tax on Knox County's 381,000 registered vehicles.
Many states have ad valorem or personal property taxes attached to the tag purchase and renewal process, raising hundreds of millions of dollars by broadening their tax bases.
Tennessee's $24 basic fee hardly pays the cost of preparing and issuing a plate and its decals. More than half of the state's counties already collect a privilege tax, or wheel tax. Call it what you will, it raises the average annual fees in those counties to $60, exactly what Nashville/Davidson County collects and twice what the new fee would be in Knox County if the ordinance passes on second reading next month.
Several cities add on their own wheel tax. The highest total fee in the state is in Memphis, where a tag or renewal costs $103. The city there tacks an extra $30 on the $73 total fee collected by surrounding Shelby County. So does Jackson, at an added $15, and Chattanooga, at a paltry $5. Knoxville and Knox County have remained at the state's minimum for far too long.
The wheel tax has been used in big metropolitan jurisdictions and small rural ones to take some of the pressure off their property tax and local-option sales tax rates.
Knox Countians are saddled with a sales tax rate that is near the state's highest and is collected on most purchases and services every day of the year. A one-time annual tax on motor vehicles may seem painful at the moment of collection, but it is preferable to paying a penny on virtually every dollar spent.
Until we get genuine statewide tax reform with a graduated income tax of some kind that will ease the sales tax load on those who can least afford it, a wheel tax on vehicles should be imposed in every Tennessee jurisdiction. An annual total fee of about $50 to $60 per license plate would be most reasonable, and it is not a tax that should be rolled back in the process of tax reform.
Let's not keep citizens of Knoxville and Knox County forever involved in a car culture that doesn't pay its own way.
May 29, 2003 * Vol. 13, No. 22
© 2003 Metro Pulse
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