Sunday, October 14, 2007

Can The RTA Impose A Parking Space Tax?

A meme is starting in the comments to a previous post on a parking space tax to the effect that the RTA already has the authority to impose such a tax. This is based on the recent testimony (pg. 3) of Peter Skosey of the Metropolitan Planning Council that the "RTA has long had the authorization to levy a property tax on commercial parking spaces in the region."

Hold on to your shorts. It appears that Skosey misspoke. The RTA cannot currently impose a parking tax and the parking tax referenced in the RTA Act is not the kind of broad-based tax on non-residential parking spaces that will do the most good from a transit/land use perspective.

Section 4.03(d) of the current RTA Act provides in relevant part as follows:

(d) The Board may impose a motor vehicle parking tax upon the privilege of parking motor vehicles at off‑street parking facilities in the metropolitan region at which a fee is charged, and may provide for reasonable classifications in and exemptions to the tax, for administration and enforcement thereof and for civil penalties and refunds thereunder and may provide criminal penalties thereunder, the maximum penalties not to exceed the maximum criminal penalties provided in the Retailers' Occupation Tax Act.
. . .

As used in this paragraph, the term "parking facility" means a parking area or structure having parking spaces for more than 2 vehicles at which motor vehicles are permitted to park in return for an hourly, daily, or other periodic fee, whether publicly or privately owned, but does not include parking spaces on a public street, the use of which is regulated by parking meters.

First, this provision appears to authorize only a tax on paid parking ("motor vehicle parking tax upon the privilege of parking"), such as the per parking transaction tax already imposed by the City of Chicago. As outlined in the previous post, this kind of tax is much less beneficial than a tax on all non-residential parking spaces, regardless of whether parking fees are charged.

Second, the RTA Act forbids the RTA from imposing the parking tax set out in section 4.03(d). This is because the RTA has imposed its sales tax pursuant to sections 4.03(e) - 4.03(g). Section 4.03(p) of the Act provides as follows:

(p) At no time shall a public transportation tax or motor vehicle parking tax authorized under paragraphs (b), (c) and (d) of this Section be in effect at the same time as any retailers' occupation, use or service occupation tax authorized under paragraphs (e), (f) and (g) of this Section is in effect.

In other words, having imposed the sales tax pursuant to 4.03(e) - 4.03(g) the RTA cannot impose the parking tax provided for in section 4.03(d) or, for that matter, a tax of up 5 percent of the gross receipts from the sale of fuel (4.03(b)).

4.03(p) goes on the provide that once the RTA has opted to adopt a sales tax, it lacks the power to switch back to a parking tax and/or fuel tax:

(p) At no time shall a public transportation tax or motor vehicle parking tax authorized under paragraphs (b), (c) and (d) of this Section be in effect at the same time as any retailers' occupation, use or service occupation tax authorized under paragraphs (e), (f) and (g) of this Section is in effect.

In other words, having imposed its sales tax the RTA cannot now add on a parking (or fuel) tax. Section 4.03(p) goes on to forbid the RTA from switching from a sales tax to parking and fuel taxes:

Once any tax authorized by paragraphs (e), (f) or (g) is imposed the Board may not reimpose taxes as authorized in paragraphs (b), (c) and (d) of the Section unless any tax authorized by paragraphs (e), (f) or (g) of this Section becomes ineffective by means other than an ordinance of the Board.

It would be easy to draft an amendment to the RTA Act to allow the imposition of a tax on all non-residential parking spaces even with the sales tax in place. Proponents of SB 572 seem unwilling to consider such an alternative, unfortunately.


Davey said...

Wow. Thanks for the clarification. This wording demonstrates beyond any doubt that the RTA is as you said earlier, "a Republican/suburban preserve. It was foisted on the City of Chicago early in the Harold Washington administration, when the City was divided (and weakened) politically and the CTA was desperate for cash.

The provisions of the RTA Act were stacked in favor of the collar counties and remain so to this day."

They made sure that only Chicago and inner-ring burbs would be taxed on parking while shopping while the "free" parking at the malls would get a pass in perpetuity. Once again we're hit with the reality that real reform of Northeastern IL transportation is only a subset of the desperate need for radical reform of IL state government.

Anonymous said...

Thanks for clarifying what was obvious to anyone who had read the RTA Act. Why is anyone testfying in front of a governmental Committee making such an amateur mistake? It's terrible? Don't they have fact-checkers at MPC?

Anonymous said...

The parking-space tax is nothing but a form of a land tax (Henry George fans--where are you?) and could easily be done via the Assessor's Office. Technically easy, albeit politically difficult.

Does anyone know what a typical rate per space would be? Is it high, would it cause land-owners to go crazy? How much would it raise regionally? Since we can't expect the insiders to run those numbers (or at least share them with us), I suggest we come up with it on our own.

Moderator said...

In his testimony Peter Skosey estimates that a $60 per space per year tax would yield between $175 million and $225 million annually.

The parking space tax in the Australian cities is in the $400-$800 per space per year range. (See Todd Litman article.) I believe the cities in Great Britain considering such a tax are anticipating per-space rates in the same range.

Anonymous said...

This is great--lots of people staring to come around--well here's another clue for you all-- the walrus is the existing Transit Districts and their unfulfilled levies-- see IL Dept. of Revenue "Other Local Districts"....

Anonymous said...

Hey anon 5:07, why so cryptic? Make sense, will ya?

Moderator, thanks for moving on the numbers. So I figure a relatively mid-sized grocery store, say a Jewel or Dominicks may have, what, 120 spaces? What's that: $7,200 a year? Not chump change, but if you figure that that sized property probably has $70-100k (more?) in property taxes, then it's probably in range of acceptable, although with a big a fight. sound reasonable?

Would schools, universities, churches, hospitals be exempt? probably, right?

Moderator said...

Todd Litman, the parking space tax guru, who is in town Monday for the Lipinski Symposium, argues that the parking space tax should apply as broadly as possible. He says even publicly owned/operated parking facilities should be subject to the charge.

I doubt, however, that a parking space tax could be extended to tax-exempt entities.

Anonymous said...

Cook Mass Transit Districts: Low Hanging Fruit or Slow Moving Meat?

Anonymous said...

Cook Mass Transit Taxing Districts


Pskosey said...

Moderator: You are of course technically correct. The RTA statute does contain the provisions for a parking tax and has since its rewrite, but modification would be necessary to allow them to apply it today-- as you also pointed out. Since this was being raised in the context of necessary legislative changes, ALL the proposed financing mechanism would require additional modification to the statute. Thanks for clarifying.

Anonymous said...

anon 5:07, what are you talking about? the suburban mass transit districts are just shells today that own equipment that Metra operates. I think the central area "urban mass transit district" was set up to fund the Circulator. in any case, they're all dormant, so there's nothing hidden behind that curtain

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