Parking Tax Increase Could Mean Money and Riders for Muni

870953166_e7e08b71e1.jpgFlickr photo: keever04

A ten-percent increase in the commercial off-street parking tax, from 25 percent to 35 percent of gross receipts, could bring in $20 million for Muni and reduce congestion by nudging downtown commuters towards transit, all without requiring any statewide legislative changes. But the proposal faces an uphill battle: A recent poll showed just 38 percent of respondents support even a 5 percent increase in the tax, and a similar measure gained even less support in 2006.

Still, it just might be the MTA’s best hope for new revenue via the ballot box this November, given the obstacles the vehicle license fee faces at the state level.

Of the five ballot measure ideas presented by MTA staff last week, "it seems like it’s the most achievable politically," said Livable City’s Tom Radulovich. It’s also a means to charge people who don’t live in the city, and thus don’t pay city taxes, for the congestion impact they create. "The parking tax is a way to even out the imbalance of not getting money from people who commute in," Radulovich said.

That’s backed up by a study that found 62 percent of monthly parkers in city-owned garages downtown reside outside of San Francisco.

San Francisco Planning and
Urban Research Association (SPUR), an urban planning think tank, proposed such an increase for similar reasons in its 2006 Muni funding policy paper, "Muni’s Billion Dollar Problem." SPUR Executive Director Gabriel Metcalf said he stands behind the paper’s recommendations and favors taxes that encourage a shift from driving to transit, like the parking tax, over a parcel tax or a hotel occupancy tax, which he said have less of a direct tie to
transportation
.

Even so, there’s no guarantee SPUR would officially endorse an increase in the parking tax if it makes it to the ballot. In 2006, a 10 percent increase in the parking tax was on the ballot, but SPUR took no position on it. That’s because the measure, Proposition E, would not have specifically dedicated the funds to the MTA, and instead would have sent them to the city’s general fund.

Any tax dedicated to the MTA would require a two-thirds majority vote, while a general tax needs just a simple majority. MTA Chief Financial Officer Sonali Bose said during a presentation last week that it might be possible to make the measure a general tax, with an agreement from the city that the MTA would still receive most of the money, similar to how the current parking tax works.

Given the economic climate, it might be nearly impossible for any tax to get a two-thirds majority. Chamber of Commerce public policy director Jim Lazarus doubts the commercial off-street parking tax would even garner a simple majority. "It’s been defeated before," he said, referring to 2006’s Proposition E. Exit polls at the time showed that "even the bicyclists voted against it," said Lazarus.

Indeed, it received just 33 percent of the vote, but Dave Snyder, SPUR’s former Transportation Policy Director and the lead force behind a new Muni riders union, said virtually no campaigning was done for that measure. "It was on the ballot along with tons of other stuff," said Snyder. He supports the increase, arguing it would have a desirable effect on transportation and land use behavior. (He’d also like for such a measure to close a loophole for valet parking, which the 2006 measure wouldn’t have done.)

Daniel Murphy, chair of the MTA’s Citizens’ Advisory Council, said the CAC has supported a parking tax increase in the past, but he remains unconvinced of its political viability. "That kind of thing has been in front of voters before and didn’t fare well," he said.

Moreover, "the revenue you get from that is not huge," said Murphy.

$20 million in new revenue could mean the difference between a 3 percent cut in Muni service instead of a 10 percent cut, not exactly unsubstantial. Still, it would require a tough campaign, and would not be a budget panacea.

MTA CFO Bose said an alternate idea would be to apply the higher tax rate only to garages that don’t conform with the Planning Code’s requirement that downtown garages only charge hourly rates – no daily rates, monthly rates, or early bird specials allowed. That would bring in a lot less money, but would still generate revenue just by forcing garages to do what Sec. 155 (g) in the Planning Code calls for.

SPUR supports greater enforcement of that rule as well, since it encourages the use of downtown parking garages for short shopping trips instead of all-day commuter parking.

As for the poll numbers, there may be a slim silver lining: while just 38 percent support a 5 percent increase in the parking tax, a crucial 12 percent remain undecided. And that’s without any campaigning or mention of sending part of the funds to Muni. It’s the kind of measure that isn’t likely to go far without strong backing, but just might have a shot with the support of a well-organized constituency of Muni riders.

  • JohnB

    Well written in that it acknowledges the practical and political difficulties of passing any new or higher taxes or fees in a recession when everyone is feeling pain.

    A few random thoughts on this.

    I vehemently oppose any attempt to ban garages from offering “deals” or “packages” such as a ban on early-bird specials or monthly rates. It’s not the role of government to tell private enterprises how best to manage and market their business. Tax them by all means, but who in their right mind would tell Taco Bell they can’t offer a 99c taco, or ban bars from having a happy hour? If Muni can offer a monthly FastPass then Garages should be able to do the same.

    If dedicated MTA funding requires a 2/3 vote but a general fund measure requires only a 51% vote, then it is dishonest and disingenuous to go for the general option with a “behind the scenes” promise that MTA will get some portion of that. That is crying out for a lawsuit challenge and is a blatant attempt to hoodwink the voters out of their constitutional right.

    If a measure doesn’t get the required support, chances are it was no good to start with.

    Other than that, I’ve rather changed my mind on this topic. Whereas I formerly opposed any tax or fee increase, I am now happy for those to be proposed, as long as the final decision lays with the voter. I’d prefer a bad proposal that the voters can defeat to a half-bad proposal where the voter gets no say.

    In other words, I have faith in the electorate.

  • John, the current law bans offering deals and packages. This is not at all uncommon in cities around the country. The issue is that they don’t enforce it equally across the board because the Planning Department lacks an enforcement capacity. Comparing municipal parking to cheap tacos is misleading. Besides, you’d have to delve pretty deep into the farm bill to argue that we’re not already subsidizing Taco Bell’s 99 cent offerings.

    http://www.pcrm.org/magazine/gm07autumn/health_pork.html

  • Schtu

    @ John B – The Planning department places restrictions on how businesses can operate and what they can sell all the time. Especially when construction of the facility is subject to conditional use. They don’t tell Taco Bell they can’t charge 99c but they do tell them they can not have waiters bring your food to your table. They can’t sell Taco’s wholesale to other businesses, they can’t serve food cafeteria style. It is called zoning.

  • JohnB

    Matthew and Schtu,

    I’m still struggling with the analogy here.

    Taco Bell taco’s contain (I feel sure) a whole bunch of sodium, fat and cholesterol. But we don’t tell Taco Bell that they cannot discount them just because we think it’s bad for people.

    Likewise alcohol is bad for you in excess but we don’t ban bars from two-for-one deals or happy hour specials.

    Likewise, while we might not like people driving into the city, we can’t ban them. Garages are enterprises and should be free to have any charging structure they like. If they lose money then that is their problem. It’s not like taxpayer money is being used to subsidize cheap parking. In fact, it’s quite the converse.

    If you really want to discourage commutes by private car then start a voter initiative for congestion charging.

  • Schtu

    The code reads:
    (g)
    In order to discourage long-term commuter parking, any off-street parking spaces provided for a structure or use other than residential or hotel in a C-3 District, whether classified as an accessory or conditional use, which are otherwise available for use for long-term parking by downtown workers shall maintain a rate or fee structure for their use such that the rate charge for four hours of parking duration is no more than four times the rate charge for the first hour, and the rate charge for eight or more hours of parking duration is no less than 10 times the rate charge for the first hour. Additionally, no discounted parking rate shall be permitted for weekly, monthly or similar time-specific periods.

    Moreover it has been on the books since at least 1985 which means that it was a condition of approval on any garage constructed after that date at a minimum.

    Regarding voter initiative, I would suggest that if you don’t like the Planning code that is on the books, then you need to start a voter initiative to repeal it. Personally, I prefer representative democracy. I am reminded of the disastrous effects of ballot box planning every time I watch my neighbor pull his Mercedes into his Prop 13 taxed garage.

  • patrick

    JohnB, all sorts of businesses are regulated in all kinds of ways, anywhere from sub neighborhood level, to national level. They don’t regulate 2 for 1 alcohol, but they do regulate when it can be sold, they also regulate infused liquor. It’s not a question of any vs. no regulation, but finding the appropriate level of regulation.

    But as far as I know this argument is misplaced, as what is being discussed is an increase in taxes on private garages. The issue you are talking about (no early bird, no monthly passes) only applies to publicly owned garages, and that law is on the books. I could be wrong, but that is my understanding.

    I’m with you on putting the tax increase to a vote, and if it fails… well, the people have spoken, although I don’t really agree that 1/3 of the people should get to decide that a tax cannot be raised, but on the other hand, I think the real reason behind our budgetary issues are due to waste in the city government than insufficient tax revenues.

  • Buster

    Regarding the planning code: How many planners would it take to enforce this law? Seems pretty easy to me to tell if a garage is obeying the law or not. Fines could bring in the revenue for enforcement.

  • Diane

    “A recent poll showed just 38 percent of respondents support even a 5 percent increase in the tax, and a similar measure gained even less support in 2006.”

    Well, if you polled Muni riders, I’ll bet that even 38% wouldn’t support a fare increase, now would they? But they’re not asking US. So why do they pay more attention to people and businesses that don’t want their parking rates increased? Riders of public transit are the poor stepchildren in our Transit First city…

  • JohnB

    Diane,

    Fare hikes don’t require voter approval so it doesn’t matter that Muni travelers don’t approve. And when did any customers of any product or service approve of price increases?

    But bond measures require either a 51% or 67% majority in the pools or they don’t happen. It’s the law. And so 38% is a pretty significant shortfall.

    Americans have a long tradition of voting down excessive taxes. We’re not Sweden. But if and when a tax idea enjoys popular support, it can reach the 2/3 hurdle imposed by Prop 13. It’s not impossible but requires careful crafting AND a sound marketing campaign.

    Time to stop holding summits and work that silent majority . .

  • patrick

    Parking meter rate changes also do not require voter approval.

  • I’m not a “customer” of MUNI anymore than I am a “customer” of the police department. MUNI is a public service, not a product.

  • JohnB

    SFREsident,

    Yes and No. It’s not free so it’s more like Water (City run but still commercial) rather than Social Services (City run but doesn’t charge and not run like a business).

    Patrick,

    I believe that increasing the tax on parking requires voter approval.

    Obviously garages can charge whatever they like.

    The City can change meter rates w/o voter approval but it is a very public and delicate issue and so it’s much more political.

  • patrick

    Parking meter rates, not a tax on parking. I brought it up because you mentioned that fares can be raised without voter approval, which is also a public, delicate & political issue.

  • JohnB

    People see meter rates as something the city imposes while seeing muni fares as more dependent on muni costs

    Meters cost almost nothing to operate – its pure profit for the city. which is why people are more wary about them – they see meter rates as a tax in wolves clothing, which of course it is

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