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Motznik's parking tax plan getting a spotty reaction
Wednesday, September 26, 2007

In politics, calls to keep taxes high are rare, so the most surprising thing yesterday about a plan that would keep Pittsburgh's parking levy at 45 percent was that nobody slapped it down.

Mayor Luke Ravenstahl and state legislators stopped short of endorsing city Councilman Jim Motznik's plan to cancel mandated cuts in the tax and instead use some of the parking revenue to cut city debt and boost its troubled pension fund. But they didn't rule it out, either.

"If a parking tax freeze would happen, and obviously that would require state action, I certainly firmly support the dedication of that revenue to pension and debt," Mr. Ravenstahl said. "It's something that we're going to dig into this fall."

The tax was boosted from 31 percent to 50 percent in 2004. Later that year, the Legislature allowed the city to raise other taxes, but told it to drop the parking levy to 35 percent by 2010. Now, with the tax at 45 percent, if a lot operator wants to keep $10 of the fee, he must charge another $4.50 to pay the city. But despite the tax rate decrease, operators continue to charge the same fees as when the tax was at 50 percent.

Next year, state law demands a dip to 40 percent, but since operators didn't cut their prices this year, Mr. Motznik wants to cancel that decrease.

"The rates aren't going to be lowered, let's face it," he said. Tax cuts are "making the owners fat rats, and it's not going to continue."

State legislators took the position that the city would need their approval to cancel the rate cuts. Sen. Jim Ferlo, D-Highland Park, has introduced legislation that would allow the tax to stay at 45 percent.

"The tax rollback was meant to help the consumers," said Sen. John Pippy, R-Moon. "If it's not helping the consumers, and it's only helping the operators' profit margins, then maybe it should be looked at."

"Is this another way of helping the city with its financial issues without hurting the consumer?" asked Sen. Wayne Fontana, D-Beechview. "I guess I could be talked into it."

Lot owners have said the tax cuts offset rising wages and insurance costs.

Mr. Ravenstahl said predictions that the initial tax hike would depress business Downtown proved false.

"Parking in Downtown Pittsburgh is near capacity," he said. "The parking tax, in and of itself, is not a deterrent to the extent that may be suggested by other entities."

Some Downtown businesses disputed talk that high tax rates don't hurt.

"I know of three businesses that moved out of town after being here for over 20 years," said Tom Sullivan, a broker with Pennsylvania Commercial Real Estate Inc. He cited a law firm, an accounting firm and an advertising company that collectively rented 30,000 square feet of Downtown space before leaving after the parking tax hike.

The executive committee of the Pittsburgh Downtown Partnership met yesterday, but did not reach a consensus on changing its policy on parking taxes, which calls for continuing the tax cuts and pushing for lot rate reductions.

Mr. Ravenstahl suggested that he won't pressure the Pittsburgh Parking Authority, whose board he appoints, to cut its rates.

A rate cut "would equate to, in many cases, less than a dime a day," he said. "... it would cost us more to go around and change our signs, [and] change our machines" than it would save consumers.

His administration released data from the authority's March 2007 rate survey indicating it charges less than half what private operators do for up to two hours of parking, and its rates are around 40 percent below private rates for a full day.

First published on September 26, 2007 at 12:00 am
Rich Lord can be reached at rlord@post-gazette.com or 412-263-1542.
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