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Is Philly’s parking tax too high? Garage owners blame it for rising cost of parking

Owners of Philly parking garages are warning drivers that the cost of parking could increase to as much as $50 to $70 per day. They hope to pressure the city to lower their taxes.

A cyclist passes in front of a parking garage at 16th and Addison streets in Philadelphia, PA on August 29, 2017. The garage is set for demolition to make way for townhouses.
A cyclist passes in front of a parking garage at 16th and Addison streets in Philadelphia, PA on August 29, 2017. The garage is set for demolition to make way for townhouses.Read moreDAVID MAIALETTI / Staff Photographer

Parking for a day at a private garage in Center City now typically costs $20 to $30.

But owners of those garages are warning drivers that the price could increase to as much as $50 to $70 per day. On Thursday, they posted fliers in their garages and handed out pamphlets to announce that threat.

Robert Zuritsky, president of Parkway Corp., said he places a large share of the blame on the taxes paid by the parking industry, including a 22.5 percent parking levy. Owners of lots and garages also pay property and use-and-occupancy taxes — both of which have increased significantly with recent reassessments.

The result, according to Zuritsky: "Our [parking] rates are going up too fast."

The number of parking spaces in Center City is decreasing; Philadelphia has lost thousands in the last several years as owners of lots and garages convert them into more lucrative developments, such as hotels and apartment complexes. Philadelphia-based Parkway Corp. is among the companies that have redeveloped their parking real estate and, in many cases, have not included any parking spaces in the new construction.

Zuritsky, along with other garage owners, has been lobbying city officials for years to reduce the parking tax, which is paid by drivers and included in the parking rates quoted by garages.

Now, they're taking their fight to the public. In parking garages and lots across the city Thursday, a group of garage and lot owners that belong to the Philadelphia Parking Association began hanging posters and handing out pamphlets telling motorists that the price of parking is expensive because taxes are too high.

"Half of every dollar you pay to park here goes directly to the City of Philadelphia," the posters read, underneath an image of a $20 bill ripped in half.

Contending that they are losing money or just breaking even at the current rates they charge, parking garage owners have a proposal for the city: Lower the parking tax rate and offset the loss of revenue by taxing on-street metered parking or raising fees for residential permits, contractor permits, and parking violations.

After years of the parking industry's lobbying unsuccessfully to lower the parking tax rate — City Council voted to increase it in 2008 and again in 2015 — it remains to be seen whether its efforts will lead to change. Council passed a bill in 2011, sponsored by then-Councilman Jim Kenney, that would have lowered the rate. Then-Mayor Michael Nutter vetoed it.

While a spokesperson for Mayor Kenney said that conversations with the parking industry are ongoing, Kenney's chief of staff, Jim Engler, said that he doesn't want to base decisions based on the input of just one industry.

"We should be looking at it holistically and setting the on-street parking rates because of everything else that is happening and because of the overall economy, the overall road space that we have," Engler said.

Any legislation to change the parking tax would need to go through Council. Zuritsky and his father, Joseph, chairman and CEO of Parkway, said they have met with Council members, and would first like to have Kenney on board.

After hearing doubts from the mayor's office about the idea of taxing on-street parking spaces, the Zuritskys chose to launch a more public campaign, including the fliers and posters.

Joseph Zuritsky said he has not included spaces in the development of some of his parking lots because parking is not profitable enough,  but he still worries about the loss of spaces in the city and a potential parking shortage in the years to come.

"We think that is a disaster," he said. "What are you going to do, start tearing down these high-rise buildings?"

The parking tax is projected to raise more than $100 million in the current fiscal year. Philadelphia taxes parking at a higher rate than most other major cities, according to a report that garage owners commissioned from Econsult Solutions. Like other business owners, the parking industry has also faced other tax increases. The property assessment at the Parkway-owned lot at 13th and Locust Streets, for example, increased 94 percent between 2017 and its latest 2019 assessment. That amounts to a nearly $22,000 tax bill increase annually.

The Parking Authority taxes for parking in its lots and garages, but not metered on-street spots. Expanding the tax to those spots is the garage owners' top choice to offset their proposed tax decrease. The city's legal department determined that metered parking could not be taxed legally, Engler said.

The city's 2015 Center City parking inventory — a report completed every five years — found that the average one-hour parking rate increased from $9.98 in 2010 to $13.39 in 2015. The 2017 Econsult report commissioned by the parking industry found that the price of parking for one hour is about $16. But given tax increases that went into effect with new commercial property assessments in 2017, Econsult said, garages would need to charge $25 for one hour of parking to break even. To maintain profit margins, Econsult said, parking would cost $34 per hour.

Engler said the mayor's office is open to discussing options, such as raising the fee for contractor permits, which have not been adjusted in several years.

"We're obviously open to those discussions," Engler said. "We understand the concerns that the garage owners have. At the same time, we have a school district that is in consistent need of revenue, we have a 26 percent poverty rate, and we are trying to make sure that we can provide services."