Per-space parking-lot tax would make senseBy raising the...


June 22, 1996

Per-space parking-lot tax would make sense

By raising the parking tax, the Baltimore City Council not only balanced the budget but also confirmed that downtown is not moving toward the ubiquitous free parking that has fed suburban growth.

The City Council took advantage of the fact that parking is one of the few revenue sources that is stronger in the city than in the suburbs.

That people are willing to pay for the privilege of parking their cars downtown demonstrates a certain strength to the heart of the city. The cost of parking supports the expensive parking structures and rations valuable street space that are requisites to the intensive building density that makes downtown what it is. If parking were free, traffic volumes would soon exceed street capacities. Mass transit would be abandoned and pressure would mount to build more highways leading to bigger and cheaper parking lots.

Downtown Baltimore would become another suburb.

more than people realize. A 1990 study conducted by the Department of Planning revealed that more than two-thirds of all downtown workers park free or at greatly subsidized rates. Most downtown employers have decided they need to subsidize parking to attract workers and compete with the suburbs.

Most of the people who pay the parking tax are visitors, rather than commuters. In 1990, 37,000 parkers paid the city's parking tax on an average day and about 20,000 of these were visitors. Since 1990, this trend has continued. Downtown has increasingly become a greater attraction for visitors than commuters.

When you drive to an Orioles game or the Aquarium, you expect to pay to park. When you drive to work, you often do not.

This is also reflected in the marketing of parking garages. Commuters are lured by ''early bird specials'' and often pay less to park all day than visitors pay to park for an hour.

Garage operators know that visitors will be less savvy about their parking choices and will pay the higher prices.

The city's current parking tax also reflects this philosophy. The city will now charge a tax of 60 cents on all market-rate parkers, regardless of whether they park for 10 minutes or 10 hours. It also doesn't matter whether it's a $10 space under a fancy hotel or a $2 space on a vacant lot at the edge of civilization.

The new parking-tax increase will further favor commuters over visitors. While the tax on a one-hour or one-day parker will increase by a third, the tax on a commuter with a monthly parking contract will increase by only 8 percent. About four out of five commuter parkers have monthly contracts.

While it is well known that the cost of parking is an impediment to workers and businesses locating downtown, it is not known how town's vitality and are responsible for most of its recent successes. They also pay most of the parking tax.

There is another alternative to the percentage and per-car parking taxes: A per-space tax. The city could simply levy a tax on every parking space, regardless of its use or price. A per-space tax would have numerous advantages:

It would be difficult to pass the tax on to the parker. The tax would be an up-front cost of doing business.

Private and employer-subsidized parking could be taxed along with public parking and would no longer avoid the tax.

Operators would be encourties as intensively as possible. Well-used, high-turnover lots would pay the same tax as a similar but mostly empty lot.

The temptation to knock down buildings and make parking an interim use would be diminished. The per-space tax would function as a ''land tax'' that would promote the ''highest and best" land use for a given property, reducing the tax disincentive for maximum development.

Land-use policies could be further enforced by setting different parking-tax rates in different districts. The parking tax could be set higher in historic areas to discourage demolition and lower in fringe areas to divert traffic congestion.

Enacting a per-space parking tax would be easy. Public parking facilities already pay an annual license fee of about $15 per space, which raises about half a million dollars per year. This fee could be raised and extended to all parking, private as well as public. It would eraged $400 per space would raise about $20 million from the approximately 50,000 public and private parking spaces in downtown Baltimore (excluding city-owned facilities).

This is more than double the revenue yield from the current per-parker tax, even with the recently approved rate hike.

Parking lot owners would be opposed to this, of course, but what could they do? They couldn't pack up their parking lots and move to the county? More likely, they would try to increase the parking demand and reduce the asphalt expanse by developing their properties.

A per-space parking tax would then make downtown look and feel less like suburbia.

Gerald Neily


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