Canton may try vehicle tax again
Four years after the Town of Canton made an unsuccessful push to impose a vehicle tax to fund much-needed road repairs, town officials are contemplating another attempt.
Back in June 2018, the town proposed a $30 yearly vehicle registration fee that would apply to all vehicles registered in the town, except for government vehicles, auto dealer inventory and non-motorized vehicles like trailers.
At the time, the town estimated that the tax would raise around $60,000 a year.
Stemming from a state statute enacted in 1986, the first $5 of the vehicle tax can be used for any purpose, but the next $5 must be used for public transportation, if such a system exists in the town. The rest of the tax, up to the maximum $30, must be used for roads or streets.
A lengthy public hearing was held, with almost no one supporting the tax. Many cited the potential impact of the tax on people with fixed incomes or multiple vehicles, and some resented that they had to pay to fix roads that people from outside Canton use as well.
Alderman Dr. Ralph Hamlett said he felt the fee was regressive in that it would hurt the people who can least afford to pay it. Alderwomen Gail Mull and Kristina Smith Proctor joined Hamlett in voting against the it; then-Alderman James Markey was absent, and Canton’s mayor only votes in the case of a tie, so the motion to enact the fee died 3 to 0.
“This is obviously a volatile issue. We found that out a few years ago when that was raised,” said Zeb Smathers, Canton’s mayor, during the town’s annual budget retreat held last week. “One of things we heard was, ‘Spend down what you have.’ We’ve done that.”
Each year, the town receives around $160,000 in Powell Bill funding from the state, earmarked for roads. While some of that goes toward consumables like salt, a good portion goes toward ordinary wear-and-tear repairs, like potholes.
Whatever the town has left over each year goes into a sort of savings account and at the time of the 2018 proposal, there was about $400,000 in that savings account. Now, that’s no longer the case.
In 2021, the town spent around $60,000 to pave the equivalent of a 30-foot-wide road nearly a mile long — around 14,400 square yards.
“We did what we consider a fair amount of paving, but that doesn’t get you very far,” said Town Manager Nick Scheuer.
Now, the town estimates that 4,000 cars would be eligible for the $30 tax if it’s enacted. That would raise approximately $120,000, and since the town doesn’t have a public transit system, all of it would be dedicated to road maintenance.
“Without it, you are looking at band-aids,” said Natalie Walker, Canton’s chief finance officer.
Pulling money from the general fund balance isn’t really an option as Canton strives to maintain a financial cushion to pay for much-needed flood-related items while awaiting reimbursement from FEMA, but other options to keep up on Canton’s aging road system are scarce.
Smathers stressed that right now, the fee proposal is just that — a proposal. As the town goes through its budgeting process for the coming fiscal year, the proposal may or may not make it into the final budget. If it does, the town board would then have to pass an ordinance similar to the one that failed in 2018 after holding a public hearing on the matter.
By state law, municipal budgets must be passed by July 1, so there will be more clarity around the issue come May or June.
Both the Town of Waynesville and Town of Maggie Valley have similar fees; Maggie Valley’s is $5, and Waynesville’s is $15.
Property tax increases are not expected in Canton this year, perhaps making the fee easier to swallow for residents.