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Question of the day

Friday, Oct 5, 2007

* I wrote about this yesterday in the Capitol Fax, and the Daily Herald picked it up today

As the clock ticks closer toward a transit “doomsday,” officials are backing away from a sales tax hike and opening up to ideas like a property tax on parking spaces.

* More

“People would pay a certain amount of money based on how many parking spaces they had on their property whether it’s free parking or sold parking. That’s very cumbersome to try to collect, but it is being bounced around,” [said Sen. John Cullerton.]

As I told subscribers, the plan was floated this week by John Filan, the governor’s budget guru. Filan claimed the tax surcharge would be levied on commercial parking spaces only (both free and paid). Residential parking would supposedly be exempted.

Question: What do you think of this one? Also, do you think it’s preferable to a regional sales tax hike of a quarter point? Explain.

- Posted by Rich Miller        

47 Comments
  1. - OneMan - Friday, Oct 5, 07 @ 9:54 am:

    Since the city of Chicago has leased out several parking facilities would those leased facilities be subject to this?


  2. - Rich Miller - Friday, Oct 5, 07 @ 9:57 am:

    I doubt the idea has progressed that far, OneMan.


  3. - GoCubsss - Friday, Oct 5, 07 @ 10:03 am:

    I think if they structure it as a congestion-type tax, with higher rates in downtown/congested areas, then it makes a whole lot of sense. But then again, those malls do contribute to a whole lot of congestion.

    I think Sen. Radogno was saying last week that she preferred more user fee/car-related taxes than the sales tax. So, maybe this has some traction among republicans. That would be interesting to find out.

    At the very minimum - they should just put a tax on paid parking spots. Tax the people that clog the expressways and streets when they drive downtown when they could just as well take public transportation.


  4. - pickles!! - Friday, Oct 5, 07 @ 10:03 am:

    Sounds like another tax geared specifically towards the commercial business community. A sales tax would be distributing the burden much more.


  5. - Google Consulting - Friday, Oct 5, 07 @ 10:06 am:

    Didn’t JF say they could use google earth to locate these parking spaces? what about non-surface parking lots?

    I thought it was a ridiculous idea to begin with, but when you have to come up with a rushed alternative in the wake of an uncompromising boss, I guess this happens.

    It’s like writing a term paper the night before it’s due. Sure, it might be well written, but you can pick it out amongst other term papers with more time invested in them.


  6. - Six Degrees of Separation - Friday, Oct 5, 07 @ 10:12 am:

    Unintended consequences - would this be good for Chicago, or bad for Chicago, overall? I agree it would be good for public transit. Wouldn’t affect me, because I avoid parking downtown and prefer Metra for my trips in. But would it also be bad for downtown business and cultural activity, and help accelerate the 3rd-worst population drain in the U.S., as people head for wide open parking spaces in the burbs and beyond? (Orleans Parish LA #1, Wayne County MI #2, Cook County #3). But maybe the increase will have nil effect, as parking is already outrageously expensive downtown, and another 10% or so won’t deter those who absolutely want to drive.


  7. - plutocrat03 - Friday, Oct 5, 07 @ 10:13 am:

    Same old topic, different tune.

    The question from the governmental side is ‘what is the most palatable way to collect money for my purposes’ The choices are getting more and more difficult.

    An interesting point to consider is that most towns have a formula which defines how many parking spaces a business is required to install in order to service their customers. So on one hand one governmental entity requires you to have a certain number of parking spaces, while another will have their hand out demanding money because of these required spaces?

    Yet again the discussion is focused on where to get more money rather than how do we spend less. We could get somewhere if the same intensity was placed on both sides of the revenue problem.


  8. - GoCubsss - Friday, Oct 5, 07 @ 10:14 am:

    Rich, just did a quick search of this topic, and it apparently came up earlier this year.

    On the Front page of the “Moving Beyond Congestion” (AKA RTA) home page is their 2007 strategic plan for the RTA.

    http://movingbeyondcongestion.org/downloads/MBC_FINAL_REPORT.pdf

    On page 86 & 87, they have this listed as a potential revenue source (among all their revenue ideas:

    “8. Applied to Property Associated with Unpaid Public Parking – One type of
    property tax is a fee associated with land used for unpaid parking on commercial
    or retail property. The structure of this tax could be based on the assessed value
    of the land, the number of spaces available, or the square footage of the parking
    area. The tax is charged to the owner and the owner has the option of how to
    pass this tax through, when applicable, to retail or commercial tenants.”

    “10. Tax on Paid Public Parking (Also, see Number 8 above) – Parking taxes are
    fees imposed on all motorists occupying a paid parking spot. If imposed, the
    parking operator, whether public or private, must collect an additional fee from
    the motorist. A parking tax can be structured to be a percentage of the parking
    cost or a fixed dollar amount. Revenues generated from a parking tax vary
    depending on business activity, parking rate increases, and the tax structure. The
    tax could be structured to achieve public purpose/transit goal, e.g., a higher tax
    on longterm/
    allday
    commuter parking, as opposed to shortterm
    parking.”

    Looks like this report would be an interesting read for a bunch of ideas, actually.


  9. - Rich Miller - Friday, Oct 5, 07 @ 10:19 am:

    Yep, it was floated before, but this is the first time that the administration has expressed interest.


  10. - GoCubsss - Friday, Oct 5, 07 @ 10:23 am:

    Gotcha. Interesting…

    I suspect, then, that they are going the route of more vehicle-related fees than corporate loopholes?

    Is that your sense?

    Or would it be a mixture of both?


  11. - Rich Miller - Friday, Oct 5, 07 @ 10:23 am:

    ===Didn’t JF say they could use google earth to locate these parking spaces? what about non-surface parking lots?===

    Yeah, Filan was touting the benefits of using Google’s satellite images. Hilarious, eh? How many interns would he have to hire for that one?


  12. - GoCubsss - Friday, Oct 5, 07 @ 10:29 am:

    I don’t think they would have to use Google earth. There are property tax classifications for parking lots, etc., that would be much easier to do. It wouldn’t be that hard.

    I guess if you have scofflaws, you could save time in verification by looking at Google Earth instead of visiting the site, though.

    Or, maybe, they are going for that Google sponsorship.


  13. - Lula May - Friday, Oct 5, 07 @ 10:31 am:

    Bad idea. What’s does it cost to park in downtown Chicago ? $10-$15 for the first hour. I think they should just raise fares and let the people who use it pay for it.
    Why should other people pay for your ride ? This is why I’ll never be a Democrat. They always expect someone else to pay for their way.


  14. - Cassandra - Friday, Oct 5, 07 @ 10:37 am:

    Well, maybe somebody is getting the message that we Cook County residents are taxed out. Us middle class ones, anyway. Although Stroger and Daley are still after our money in lieu of much-needed cuts.

    I’d like to believe pols care about the impact of sales taxes on the populace but I suspect it’s pressure from the business community that is affecting this possible backing off the mass transit sales tax increase.
    After all, it’s the business community that provides so many of the pols’ “campaign” contributions. Wouldn’t want to shut that off and reduce the lifestyle.


  15. - Jaded - Friday, Oct 5, 07 @ 10:49 am:

    So the Governor refuses to raise existing taxes, but has absolutely no problem creating new ones. It is just funny listening to these guys justify their goofy ideas.

    A Sales Tax makes way more sense. Its 25 cents on 100 dollars. That’s $2.50 on $1000 and it doesn’t include food and drugs. Who cares? I am not going to get into the “clean the RTA CTA up before throwing more money at it argument” because I don’t care. Just show some backbone, raise the sales tax and quit all the hand wringing.


  16. - Levois - Friday, Oct 5, 07 @ 10:52 am:

    Sounds about as good of an idea as this congestion tax they tried to suggest for downtown Chicago. Man this state must really be struggling.


  17. - Doodles - Friday, Oct 5, 07 @ 10:53 am:

    Good comments from Google Consulting and Plutocrat03. While a tax on parking spaces has a relationship to mass transit, it would be hard to project revenues and difficult to impose. Given the immediacy of the mass transit issue, can they afford to try something new? The sales and real estate tax are known quantities. Maybe a temporary sales and/or real estate tax increase, to buy time to implement a parking space tax?


  18. - GA Watcher - Friday, Oct 5, 07 @ 10:56 am:

    Plutocrat03 raised a good point in his/her post at 10:13 a.m. re the irony of local governments requiring parking spaces on the one hand and regional or state governments imposing taxes on them on the other.

    The problem, in most of the Chicago region with the exception of downtown, is that commuters have no alternatives other than their cars to get to work. The parking lots are sized the way they are to accommodate the 90+ percent of us who have no other viable choice but to drive to work. Now, modernize and expand the existing transit system to reflect today’s and tomorrow’s commuting needs and we can talk about a parking space tax as one, but not the only way, to fund transit.

    Julie Hamos and the members of the House Mass Transit Committee offer the right funding approach to moving the region to where it needs to be.


  19. - zatoichi - Friday, Oct 5, 07 @ 11:00 am:

    Since this tax is supposed to be only commercial properties, I am sure none of those owners will increase rents, fees, or any other usage costs that will then be moved along to the customers of the organizations in those commercial buildings. Surely Sears would not increase it’s prices to cover a it’s portion of any mall parking lot tax. Factories and office operations would not increase their prices. They will simply accept the higher cost, right? How about a tax on how many miles a vehicle travels in a year, including all state vehicles, police, fire, post office, etc. How about new tolls on all the expressways. Eisenhower and Kennedy would be dream drives and make tons of money. Waiting for the tax on the number of trees on a property.


  20. - Six Degrees of Separation - Friday, Oct 5, 07 @ 11:00 am:

    Not an advocate of either plan here, just curious-

    I may be ignorant, but how much $ could be raised by taxing a few thousand parking spaces in the Loop an extra $2 or so vs. charging the 1/4% sales tax on millions of transactions in the 6-county area each day? Seems like there’s a ton more $ potential in the sales tax than the $ potential in the parking tax…unless the parking tax is expanded WAY beyond the Loop.


  21. - vince glothor - Friday, Oct 5, 07 @ 11:03 am:

    Well said Jaded, a tax is a tax is a tax. All this manuvering is not going help on November 4, when the CTA shuts down more lines and lays off more people because the Gov. stunt just postponed the envitable. Talk about a tax on the people! Layoffs, transit cuts forcing people to shell out $ for cabs, gas, parking. Greeaat, but we did stop a very modest tax increase on the people!


  22. - Old Elephant - Friday, Oct 5, 07 @ 11:20 am:

    Somebody needs to point out how ridiculous this is.

    Parking spaces are governed by municipal codes. The codes require you to provide a set ratio of parking spaces based on building size, number of offices, etc.

    So, the government says you must provide 200 parking spaces and then taxes you for having 200 parking spaces?

    Only Filan could come up with such a ridiculous proposal.


  23. - Cal Skinner - Friday, Oct 5, 07 @ 11:23 am:

    Tried and failed in the 1974 RTA Act.

    Downtown business interests begged for it to be repealed.

    Doesn’t anyone have a memory?


  24. - Jonathan Perman - Friday, Oct 5, 07 @ 11:49 am:

    Let’s remember that both Cook County and many municipalities already charge a parking tax on monthly permit spaces as well as on hourly rates. This tax is collected by operators of private lots/garages or by the municipality if they operate the lot/garage. An additional property tax would be passed on to the parking customer.


  25. - B-no name nickname needed - Friday, Oct 5, 07 @ 11:56 am:

    it saves the Gov from being labled as a tax and spend politician. but Democrats were elected across the board last time around, that is what the public wants. Raise the sales tax and stop playing name games and worrying about the next election. it’s poor people who will be suffering the most and many of them could careless about an increase in the sales tax.


  26. - Bluefish - Friday, Oct 5, 07 @ 12:08 pm:

    The problem with this idea is the revenue will be static. At least the sales tax grows (somewhat) with the economy.


  27. - Jens - Friday, Oct 5, 07 @ 12:39 pm:

    How’s doomsday scenarios have we had in 2007?
    To many to count, everything just keeps percolating along.
    When the check doesn’t get cut for Blagojevich’s salary is when doomsday begins.


  28. - A Citizen - Friday, Oct 5, 07 @ 12:58 pm:

    Democrats hold all of the strings. They will do the regional tax, the parking space tax, and anything else someone brings to light. So can it with the ideas, they already have too many now.


  29. - Techboy - Friday, Oct 5, 07 @ 12:59 pm:

    I think we need both the very modest regional sales tax hike and a way to address the transit and car issues more directly.

    I’ve mentioned before that the same technology used in IPASS can be used to control parking, creating variable parking rates wherever you want , indoors or on the street, based on whatever variables you’re wanting to control. In Wrigleyville, for example, it changes the costs for street parking depending on game status and residential status, much moire than a mre sticker can do. And you paying a highr rate is completely up to you: if you want the convenience enough to pay, park where you want and pay the monthly bill by mail or internet. It could be used to enforce winter weather parking rules. It could be used to discount parking rates in areas that could use more business, and create a variable rate for using the cars in the loop on high pollution days. You discount parking rates to people who voluntarily use the pass. It can double as an IPASS too. It could be used with taxis. It’s all relatively simple to code. Readers are put in CTA busses and those little cushman metermaid cars that just have to driv up and down the streets remotely reading the transponders as they pass and rellaying the counts and the time to a central database.

    Is there potential for abuse? Heck yes. But it also offers some interesting ways to change driving and parking behavior while generating rervenue in an efficient way. I think it’s inevitable.


  30. - jerry 101 - Friday, Oct 5, 07 @ 1:06 pm:

    bad idea.

    just increase my darn sales taxes!!!!!

    I want to pay more taxes!


  31. - Arthur Andersen - Friday, Oct 5, 07 @ 1:15 pm:

    Is a parking space tax a tax on cars, real estate, services, or “people?”

    Mr. Google Genius should also remember that no small amount of non-surface parking is partially or completely underground and as such can’t be seen from above or from street level. You know, like the parking at the Thompson Center.

    OE says it all:

    “Only Filan could come up with such a ridiculous proposal.”


  32. - Captain America - Friday, Oct 5, 07 @ 1:28 pm:

    The Hamos proposal for a regional 1/4% regional sales tax makes a lot more sense than the alternative Filan parking space tax plan. As Cullerton suggests, the parking tax plan is “cumbersome.”

    I doubt that it is really be a real long-term solution to the mass transit funding problem just another stop-gap band-aid measure. Maybe Cal Skinner should remind Senator Watson and Representative Cross that it’s been tried before and a key Republican constituency, business, does not support it.

    However, the business community and working
    people in the Chicago metropolitan ares want a comprehensive public transportation system and are willing to pay a 1/4% regionsal sales tax to avoid draconian service cuts.


  33. - Way Northsider - Friday, Oct 5, 07 @ 1:35 pm:

    Good idea. Better than sales tax hikes. However, the devil is in the details.

    As for those asking about multistory lots, I think it’s fair to only tax surface parking as that contributes to sprawl.


  34. - Team Sleep - Friday, Oct 5, 07 @ 1:50 pm:

    Instead of spending time and resources to figure out ways to keep taxing us and assigning fees for every action, product or service, perhaps it’s time for Filan and Friends to find ways to cut fat and not raise taxes. That would be refreshing and welcome.


  35. - Mr. W.T. Rush - Friday, Oct 5, 07 @ 1:58 pm:

    I can just see Filan, the Spin Sisters and maybe even Jay Magoo peering over the Google Earth site and declaring certain areas parking lots.
    Then Wyma and Co. show up and esplane they are really — what seems likely — ok, outdoor bowling alleys. Wizzo, Gizzo the tax is lifted


  36. - babs - Friday, Oct 5, 07 @ 2:37 pm:

    I’m with the sales tax increase - not the county but the regional increase for transit. Lula May, I pay taxes on LOTS of things that I don’t use - it’s called community. We all share in the cost of those things that benefit the whole. It’s really too bad that Rod missed that point while memorizing the presidents.


  37. - State Rep. Mike Fortner - Friday, Oct 5, 07 @ 2:43 pm:

    With Cook looking at a sales tax increase it makes it hard to consider that for transit as well. The parking tax may also run into problems related to local zoning as pointed out earlier. Since there’s a relevant thread here and I think there are other mechanisms available, and I’d like to suggest one.

    Illinois imposes a sales tax on gasoline as well as a motor fuel tax. At 5% the state sales tax adds about 12 cents onto a gallon of unleaded with 10% ethanol selling for $2.89. It goes up with more expensive gas. It accounted for about $600 million in general revenue in the last fiscal year.

    Now suppose that the tax were removed and replaced with an 8 cent per gallon increase in the motor fuel tax. This cuts the price of gasoline and would generate about $480 million statewide. If the amount raised in the RTA region went to the RTA it would generate about $320 million which would meet the amount that transit needed from the sales tax proposal, including a significant portion of the state match on new local revenue. The downstate portion could be used for downstate transit, passenger rail, and road projects.

    Of course this takes $600 million from the state general fund. One way to replace it is to enact legislation to join the multi-state internet sales tax. It’s a revenue stream that would roughly match the lost revenue, and in any case it is rapidly growing at a rate that will exceed the gasoline sales tax.


  38. - Squideshi - Friday, Oct 5, 07 @ 4:07 pm:

    Rich Miller wrote, “What do you think of this one? Also, do you think it’s preferable to a regional sales tax hike of a quarter point? Explain.”

    It’s an interesting idea, but I would need to see exactly how they structure the language. For example, how will a “parking space” be defined? Will a grassy lot, on which people just happen to park cars also qualify; or will there be loopholes like this? Also, I am all for transportation diversity; but what are they going to do to improve public transportation to offset this?

    I did like the idea of a congestion tax. It has worked very well in London, and the business community is now finding out that it didn’t hurt business at all (It made downtown a more pleasant place to be for a good number of people.)

    In any case, while this idea may, or may not, have merit on it’s own, it is NO solution to the structural budget deficit problem–as I said before, House Bill 750 is the solution; and the Democratic leadership needs to get serious about this.


  39. - NoGiftsPlease - Friday, Oct 5, 07 @ 6:37 pm:

    Its kind of the opposite of a user fee…the non-user fee.


  40. - fed up - Friday, Oct 5, 07 @ 6:57 pm:

    We are being taxed to death by leaders who refused to cut patronage jobs or silly spending. There is no reason to raise taxes when Blago is flying everywhere slapping his name on everysign available and is wasting taxpayer money on private lawyers to prevent taxpayers from seeing the subpeonas into federal investigations into his administration. Wasteful spending needs to be cut not taxes raised. The CTA PACE and Metra need to be combined so that money can be saved by eliminating several layers of managment, combining maintance a small increase in fares and then take a look at what is needed as far as mor revenue.


  41. - plutocrat03 - Friday, Oct 5, 07 @ 7:14 pm:

    Squid seems to be taking a page from the ;it works in Europe book’

    First of all, I think success is determined by who you ask.

    Secondly Cook County which includes the kingdon of Chicago, does not levy enough taxrs on itself, but wants the taxpayes of the surrounding counies to pay for mass tansit services that they do not have for themselves.

    At least in Lind I can get to any part of the city and suburbs on public transit. Not possible here.

    Let Cook county tax themselves.


  42. - Judgment Day Is On The Way... - Saturday, Oct 6, 07 @ 11:11 am:

    Really, really, really bad idea. Not workable at all, when you really dig into it.

    First off, a portion of the information base you need exists, but it’s scattered all over the place with all sorts of different governmental entities, data consistency is virtually non-existent, data validity is questionable at best, and even once (IF)the above problems are resolved, you still have to accurately tie the information you have established back to ownership records so it can be billed. That last one is a big stumbling block.

    Let’s break it down:

    01.A “A portion of the information base you need exists”. That’s true, but parking for many Commercial areas were established pre-Zoning (at least for parking) era, or were grandfathered in. In other words, no records.
    01.B “it’s scattered all over the place with all sorts of different governmental entities”. Can tell you right now there isn’t a township assessor/Chief County Assessment Official office in the Cook/Collar Counties who is tracking all their parking lots. Not enough time, nor resources. Do they have a lot of information? - yes. Is it readily accessible? - are you ready to spend weeks & weeks & weeks going through files, record cards, etc.? Ask yourself how many municipalities there are in all the collar counties. Happy hunting.
    01.C “Data consistency is virtually non-existent”. Just take a look at the records, as you find them. You’ll see what I mean.


  43. - Chris - Monday, Oct 8, 07 @ 12:19 pm:

    If you truly wanted a user tax why not take the technology of the open road tolling and make all of our roads toll roads and charge those who use them the most the cost of maintaining them. You could issue an I-PASS to everyone as they register their auto.

    I think a 1% sales tax hike and an elimination of fares on the CTA combined with the elimination of the head tax in the city and real reforms of the pension and the CTA administrative structure would be good for the city’s residents and for business.

    This nibbling at the edges or putting our backs to the wall in order to get a few casinos is ridiculous. Bite the bullet and start encouraging people to use mass transit and discourage people from driving autos. Add LSD to the open road tolling as well.


  44. - PC - Monday, Oct 8, 07 @ 3:59 pm:

    This was an idea that I looked into a while back, and am glad to see it’s being reconsidered. Vancouver, B.C. (host of the 2010 Olympics) recently began levying a similar tax on parking spaces, partially to pay for transit improvements necessary for the Games. There, the same agency is responsible for both transit and regional roadways, so the parking tax — effectively, a tax on car trips — makes even more sense. Parking spaces do have external costs (we taxpayers pay for the roads leading up to the parking spaces, and parking lots are a leading source of water pollution, urban heat island, and other environmental impacts) that are currently paid for out of other sources.

    It might be worth noting that the RTA does in fact have the authority to levy a tax on paid parking (and gas, and several other things), but the RTA Act prevents it from levying both the sales and parking taxes simultaneously.

    Lula, non-drivers like me pay plenty for your car trips. Those parking spaces at the supermarket, for instance; the inhalers I need on smoggy days; the Deep Tunnel to detain all the water cascading off those giant parking lots.


  45. - Way Northsider - Tuesday, Oct 9, 07 @ 12:14 am:

    State Rep - I am vehemently against taxing internet sales. It will be a nightmare!


  46. - pc - Wednesday, Oct 10, 07 @ 10:38 pm:

    @pluto, no, Cook County (particularly suburban Cook) pays far more than its share of RTA’s bills. See the reports at Rep. Hamos’ committee site for details — the collars are making out like bandits, paying very little into the system and sucking up very expensive services.


  47. Pingback week-away wrap « west north - Thursday, Oct 11, 07 @ 9:02 pm:

    […] * Sadly, two fascinating trial balloons that went up last week amidst the tax-hike frenzy got shot down really fast. A tax on parking spaces, apparently floated by the governor (and discussed here last year), appears to have disappeared into the muck. A city gas tax hike, and parking-meter increase, disappeared between last week’s rumors and this week’s proposal. Not that Fran Spielman didn’t get a chance to get a great quote about it: Ald. Toni Preckwinkle (4th) said she’s all for doubling the gas tax, but only if the Chicago Transit Authority gets the money. “I don’t think we’re going to get the help we need from Springfield. (CTA funding is) a critical issue for me, and I don’t see anybody paying attention,” she said. […]


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