Newton leaders vote to get rid of $30 annual vehicle fee; money was used to pave roads

Newton City Council voted Wednesday night to cut a $30 vehicle fee charged to car owners, which generated $344,600 for the city each year.

The vehicle fee will no longer be billed to city residents as of July 1, the start of the next fiscal year.

Revenue generated from the fee would have provided partial funding for paving the city's streets.

New city council members Scott Gilleland, Bill Powell and Recil Wright said while campaigning that they would cut the vehicle fee if elected.

"I think we paved roads before we had that fund and I make a recommendation that we remove it," Gilleland said Wednesday night.

The council voted 5-1 in favor of eliminating the fee during the second night of the council's budget workshop meetings. Councilman Jody Dixon voted against removing the fee.

Powell said that while he campaigned to eliminate the fee, he recognized it generated a significant amount of money for the city.

"It may seem silly to do that (eliminate the fee), that puts the burden on us again, to find $344,000 in this budget," Powell said.

Dixon said he voted against removing the fee because "not only will we have to find the $344,000 this year, we're going to have to find it the year after that, and the year after that and the year after that. I get the fact that you guys made a promise … but I just want to say it's not a one-time $344,000."

Powell said, "I respect the fact that there will be some reduction in paving and other things to cover that. I hope the citizens will understand why we did it."

Gilleland said Thursday night he thought the fee was unfair. He believed the city could find the eliminated funding by looking through the budget.

The budget workshop meetings were scheduled to conclude on May 14. The Newton City Council will hold at least one additional budget meeting May 21.

Proposed budget 30% less than current adopted budget

Newton City Manager Sean Hovis presented a $53,704,150 proposed 2026-2027 fiscal year budget to the council that maintains a property tax rate of 45 cents per $100 of value with no additional water and sewer fees. The proposed total budget is 32% lower than the budget that was adopted for the current fiscal year and 16% lower than the current year's amended budget.

The proposed budget does not include capital projects requested by the city's departments, such as vehicle purchases and equipment requested by the city's fire department and resurfacing the concrete around the city's pool. Hovis said the council will decide which projects they want to fund. Funding for any capital projects that the council approves of will come from the city's fund balance, Hovis said. The city expects to have about $9 million available in fund balance.

During budget workshop meetings, council members have asked city government department leaders about funding for projects and requested capital projects.

Powell asked Hovis on Wednesday night about the city's revenue projections.

"How do you feel about your numbers? Is there any way to reduce that, what you've proposed?" Powell said.

Hovis responded that the presented budget was reduced to only cover operating expenses for the city.

"There's no capital in there," Hovis said. "Everything we've got in there for capital we're proposing to use cash for, we're fine to the point to be able to do that.

"Any line items you cut, if you start making deep cuts, then you're talking about something with services or positions."

A public hearing on the budget is scheduled for the council's regularly scheduled meeting on June 2.

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This story was originally published May 18, 2026 at 5:41 AM.