Parking Tax Increase Could Mean Money and Riders for Muni

Flickr 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.