Thursday, August 02, 2007
Parking Tax Showdown in Pittsburgh?
It is possible to get the feeling that City Council really does not care if Pittsburgh has the highest parking tax rate in the country. They raised the tax rate from 31 to 50 percent in early 2004 to fill a budget gap. However, the state reform package of 2004 mandates the rate be trimmed in incremental steps to 35 percent by 2010. It will still be the highest parking tax rate in the nation. At 31 percent, parking tax collections will fall about $9 million a year compared to current revenue.
Council members are not happy that state aid and non-profit payments are not larger while the great savior—gambling money—doesn’t appear to be coming through as planned. So, they are hinting at a possible refusal to reduce the parking tax as required by law. They also trot out the tired old rhetoric about operators pocketing profits since the operators did not reduce parking rates to reflect this year’s cut in the tax rate (from 50 to 45%). The Council conveniently forgets that the Pittsburgh Parking Authority is the biggest single owner and operator of parking facilities in the City.
From Council’s comments it would appear the state has done nothing for the City but require a rollback in the parking tax. They have forgotten to thank the state for letting the City create a new payroll tax and to charge a $52 local services tax on every worker in the City. Council apparently does not remember that the reform package gives Pittsburgh a bigger piece of the wage tax by diverting money from the schools. Nor are they appreciative of the $4 million in RAD money they are no longer forced to send to the school district. All this more than offsets the parking tax decline.
If Council refuses to lower the parking tax, it will produce a showdown with the oversight board and the Act 47 team. Act 47 team members are urging Council against taking such a precipitous and counterproductive step. Violating the law is never a good decision, especially for legislative bodies. If the Council is resolute in a refusal to lower the tax, then the General Assembly ought to retract the entire bailout tax reform program and refuse to allow any further state economic development funds to come to the City.
The City must start cutting spending and quit depending on more and more opportunities to tax people and businesses. It’s ruinous behavior.
Council members are not happy that state aid and non-profit payments are not larger while the great savior—gambling money—doesn’t appear to be coming through as planned. So, they are hinting at a possible refusal to reduce the parking tax as required by law. They also trot out the tired old rhetoric about operators pocketing profits since the operators did not reduce parking rates to reflect this year’s cut in the tax rate (from 50 to 45%). The Council conveniently forgets that the Pittsburgh Parking Authority is the biggest single owner and operator of parking facilities in the City.
From Council’s comments it would appear the state has done nothing for the City but require a rollback in the parking tax. They have forgotten to thank the state for letting the City create a new payroll tax and to charge a $52 local services tax on every worker in the City. Council apparently does not remember that the reform package gives Pittsburgh a bigger piece of the wage tax by diverting money from the schools. Nor are they appreciative of the $4 million in RAD money they are no longer forced to send to the school district. All this more than offsets the parking tax decline.
If Council refuses to lower the parking tax, it will produce a showdown with the oversight board and the Act 47 team. Act 47 team members are urging Council against taking such a precipitous and counterproductive step. Violating the law is never a good decision, especially for legislative bodies. If the Council is resolute in a refusal to lower the tax, then the General Assembly ought to retract the entire bailout tax reform program and refuse to allow any further state economic development funds to come to the City.
The City must start cutting spending and quit depending on more and more opportunities to tax people and businesses. It’s ruinous behavior.
