Parking tax debate turns to growth

It could cost more to park in private lots in central Spokane if city leaders get behind ideas to tax downtown lots.

The parking tax concept is in flux, with suggestions for annual fees ranging from $10 to more than $100 a year per space, said Marty Dickinson, president of the Downtown Spokane Partnership, which opposes a parking tax.

“A lot of ideas are floating around this issue right now without any clear direction,” Dickinson said. She said a parking tax would make it harder to attract businesses downtown, “especially when you’re competing against suburban areas that have free parking for employees.”

But most City Council members say they’re open to the idea to make up for plunging tax revenue from real estate sales, which the city earmarks for street maintenance. The parking tax, they say, could help fill a portion of the shortfall and be used to improve infrastructure downtown.

Parking revenue traditionally paid for street maintenance, but in recent years most of it was shifted to cover the city’s settlement over the River Park Square parking garage. The city, which will make payments on its settlement debt annually through 2027, will pay about $2.2 million next year from the parking meter fund.

River Park Square is owned by Cowles Co., which also owns The Spokesman-Review.

City Councilman Bob Apple said a parking tax would make sure the people using city streets are the ones who help maintain them.

“Something’s got to pay for the road repairs in Spokane,” Apple said. “If it’s used for road repair, it seems logical that they (parkers) be the ones who would pay.”

The idea has been discussed for months but emerged recently during a City Council budget meeting as one of the most likely tax options the council will pursue to help close the city’s $12 million budget deficit in 2011.

Some council members say they are more likely to gain concessions from city unions if they approve a modest tax increase.

Other pieces are in flux as well, including the boundary that would be used to determine which lots would be taxed and if parking garages would be subject to the tax.

Spokane’s chief financial officer, Gavin Cooley, said the city is preparing a budget that focuses on cuts and doesn’t include new taxes.

Mayor Mary Verner said she’s doubtful a parking tax could make much of a dent in the city’s shortfall.

“I’m really not building my 2011 budget around additional revenue from a parking lot tax,” Verner said.

However, the mayor said she’s supportive of the concept. She said she is more interested if the tax exempts parking garages, which she sees as a possible incentive to build parking garages downtown and spur high-density development.

“I join other council members in believing that surface parking lots are not the highest and best use of property in downtown Spokane,” Verner said. “To tax the surface parking lots to apply a per-stall fee is appropriate from a policy point of view.”

But Jon Diamond, president of Diamond Parking, said a parking tax is more likely to hurt development downtown. Diamond has about 100 lots in Spokane. Most are owned by other people who contract with Diamond to operate them, he said.

Diamond agreed that surface parking is the “lowest use” for downtown land, but he said taxing them will hurt plans to promote higher-density development by giving employers and shoppers another reason to go to the suburbs.

He said most owners of surface lots downtown would prefer to build on them, and a tax isn’t the push they need.

Operating a surface lot is “basically a hold strategy until things are better and developers come around,” Diamond said. “They’re not getting rich off of surface parking.”

Councilman Richard Rush said a recent parking study showed that 60 percent of parking spaces downtown are full during peak hours.

If a parking tax was used to generate money to improve the infrastructure of downtown, it could create more interest in shopping and locating downtown, Rush said.

“It would benefit the parking facilities to have a more robust downtown,” Rush said.

Many council members say other tax options “remain on the table,” including a city-sponsored vehicle tab fee.

Early this month, the council rejected a plan to place a tab fee on the November ballot. State law allows cities and counties to create tab fees of up to $20 a year without a public vote.

Spokane County commissioners responded to the city’s recent discussions for their own tab fee with a letter reminding city leaders of a regional tab fee that has been discussed for more than a year.

“We know area residents believe maintaining our transportation system is one of the most basic functions of local government,” said the letter signed by the three commissioners. “We also strongly believe those same citizens prefer local governments in this area work together to form a single solution, as opposed to each jurisdiction developing its own plan.”

Verner said she prefers the county’s regional concept and was glad the council opted not to place the issue on the November ballot “to give further time for community discussion.”