What is LOHUT?
Established by the Indiana General Assembly in 1980, LOHUT is the only optional tax specifically for road funding. It is comprised of two taxes, the wheel tax and the motor vehicle excise surtax. Both taxes must be levied together and apply to different types of vehicles so no person would ever pay both taxes on the same vehicle. Applicable vehicles include those registered in Steuben County.
How does LOHUT work?
The BMV collects the applicable tax for the vehicle being registered. The collected tax is remitted to the County Auditor and County Treasurer who allocate and distribute the funds. The BMV charges a fee of $0.15/vehicle to collect the tax.
How are the funds allocated?
Funds are allocated among the county and cities and towns within the county. The distribution formula is the same formula that is used to distribute Local Road and Street funds. Since Steuben County has a population of 50,000 or less, the funds are distributed based on the 20/80 formula. This means that 20% is distributed based on population and 80% is distributed based on road mileage.
What can the funds be used for?
LOHUT funds can only be used “to construct, reconstruct, repair, or maintain streets and roads under its jurisdiction.”
When could the tax go into effect?
If adopted prior to July 1, 2017 then tax would go into effect January 1, 2018
If adopted on or after July 1, 2017 then tax would go into effect January 1, 2019
Is it a “Fair Tax”?
Some people think it is, others do not. It is fair in the respect that the only people that pay it are those that license their vehicles and use the roadways. All of the money generated in the county stays in the county. It can also be fair in that a higher fee can be charged to heavy trucks that cause more damage to roads than lighter vehicles. It can be unfair in that the tax may not be proportional to use, like a gasoline tax would be.
Why don’t we just increase the gasoline tax?
Although the gasoline tax is a more proportional tax, increasing it above current levels is up to the state, not local authorities. Efforts have been made to petition to allow local gasoline taxation, but resistance from state officials, especially for counties who have not adopted LOHUT, has been strong in recent years. Furthermore, it can be shown that LOHUT will generate significantly more revenue for our local community since Steuben County is considered a “donor county” at the state level (meaning we get less revenue in gas tax than we generate) and a “donor state” at the federal level. A video explaining the gas tax can be found here.
Is there an opportunity for public input?
We welcome and encourage your thoughts and opinions. There are several ways to voice your support or opposition. Formal processes such as a public hearing or specific website contacts may be presented in the future, but in the meantime, please feel free to contact our county council members.