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Our support for a logical and equitable way to raise county revenue

The struggle over a wheel-tax increase, already adopted by the Knox County Commission, or a property tax increase shouldn’t have been engaged at all.

One or the other is necessary to maintain county services and allow for a few needed improvements, and the Nov. 2 voter referendum item to repeal the wheel tax hike should never have been petitioned onto the ballot. Defeat it. It’s as simple as voting no.

The idea of taxing or not taxing by referendum is ludicrous in its own right, but the wheel tax was the more logical and equitable way to raise county revenues at this time.

Knox County has among the lowest fees for vehicle licensing in the nation, and its per-vehicle total is less than the municipal average for Tennessee counties. A September study by Runzheimer International, a firm that does transportation, travel and living cost surveys for most of the Fortune 500 companies put the total cost of owning and operating a motor vehicle in Knoxville just above the bottom of 12 U.S. cities it checked.

Counting such factors as fuel, oil, tires and maintenance, insurance, depreciation and license and registration fees, Knoxville’s annual cost was $7,176 for a typical, mid-size, new auto. That’s $4,000 less than the same car would cost to own and operate in Detroit, $3,000 less than in L.A., and about $1,000 less than Atlanta. Only Sioux Falls S. Dak., posted a lower annual cost, by less than $50.

Raising the wheel tax by $30, which County Commission did with little debate, made no appreciable mark on that cost picture. It is so cheap to license a vehicle here that the previous tax of $6 barely covered the paperwork cost. There is not even a single thought given in Knox County to the other costs created by cars, such as air pollution and infrastructure, including parking, though the county and city governments in Knoxville subsidize parking and are fighting off the effects of pollution with no help at all from motor-vehicle owners.

Resorting to a property-tax increase this year to cover county services is a bad bargain. An 18-cent property tax hike to raise the same $12 million as the wheel tax increase is even more regressive, spread over 200,000 property owners (and passed along to their renters) than spread over the 400,000 vehicles registered in the county. The wheel tax should really be based on vehicle value, but that’s a feature that could be implemented later. In fact, there is a significant argument in favor of making motor vehicles subject to the property tax itself on the basis of a value assessment. That’s probably a step that we’d not wish was taken. An ad valorem tax based on book value in the month of registration makes more sense.

The wheel-tax increase already includes exemptions for persons who are age 65 or older with an income of less than $12,500 per year, for persons who are disabled according to the Social Security Administration and have an annual income of less than $12,500 per year, for school buses under contract with Knox County Schools, and for persons who are permanently and totally confined to a wheelchair (registration is free for the wheelchair-bound).

Repeal itself will cost thousands of dollars in paperwork, refund processing, reissuance of property-tax statements. The 25,000 people who signed petitions that put the repeal of the wheel-tax increase on the ballot weren’t thinking about the potential impact on county government as a whole of their action. They weren’t thinking about the absurdly low cost of vehicle licensing here, approximately the same as an oil change or four dinners at a fast-food restaurant. They weren’t thinking about the consequences to all taxpayers of a wheel-tax repeal. They weren’t thinking of a total tax burden that is among the nation’s lowest, or of a hyper-regressive sales-tax rate here that is among the nation’s highest and leaves no room whatsoever for an increase. They were thinking of saving a few dollars for themselves and for those auto owners whose budgets are already stretched by a cost-of-living here that, they seem to have forgotten, is altogether lower than for most Americans.

We have to pay the cost of our government and a reasonable level of public services some way. We have said it before, and we say it again. Let’s not keep the citizens of Knoxville and Knox County forever involved in a car culture that does not pay its own way. The wheel-tax increase was the best available option when it was passed. It still is. Do not vote to repeal it.

October 28, 2004 • Vol 14, No. 44 © 2004 Metro Pulse