Indiana Boosts Highway Maintenance Budget with Registration Fees

Officials with the Indiana Bureau of Motor Vehicles remind motorists that vehicle registration fees help most counties pay for highway repair and maintenance. Currently, 55 counties in the state levy a fee for highway maintenance when motorists register their vehicles. The remaining 37 counties, primarily located in the northwest and southeast of the state, fund highway improvements with revenue solely generated from gas taxes. Given that the cost to maintain highways has risen dramatically over the last few years, counties without registration fees have found their annual budgets continue to shrink as time goes on.

Assessment of fees varies depending on the vehicle. Typically paid as an excise surtax or wheel tax, all vehicles, ranging from small passenger cars to large trailers, are charged fees. The most popular way of assessing fees is through a flat rate. Currently, 39 counties charge flat rates on vehicles when motorists complete their registration. While the average flat rate is $25, some counties charge as little as $10 and as high as $50. The 16 counties that assess fees through excise surtaxes do so based on the age and condition of the vehicle. The average excise surtax for most counties is about 10 percent. In this way of assessing fees, motorists with newer vehicles usually pay more than drivers with older cars.

Zack Smith, an engineer with Noble County, points out that fees assessed to drivers at the time of registration go solely to road maintenance and not programs like employee payroll and insurance. While much of the funds generated by fees go to county highway programs, municipalities also get their fair share. Looking at Noble County specifically, state records show that the county will get about $1.95 million in funds from the surtax and another $4 million from the county's gas tax.

While local governments understand the public's frustration over additional fees, they argue that they are the only way to maintain the state's highway system. Rick Shipe, who heads the Steuben County Council, says that registration fees are essential to preserving the county's highways and have even made it possible to do badly needed reconstruction on many local roads.