A battle may be brewing over what to do about state-mandated reductions in the city's parking tax.

Rather than freeze the tax at 45 percent, city Councilman William Peduto wants to force the Pittsburgh Parking Authority to cut rates by 12.5 percentage points over the next two years, commensurate with state-mandated reductions in the levy.

His proposal, unveiled yesterday at a news conference in a Shadyside parking lot, came two days after city Councilman Jim Motznik advanced a plan to freeze the parking tax at 45 percent and use some of the revenue to cut city debt and bolster its troubled pension fund.

Mr. Motznik wants to keep the rate at 45 percent out of frustration that parking operators, including the city authority, did not lower their rates after a state-mandated reduction in the tax from 50 percent to 45 percent this year.

The tax is scheduled to be cut by another 5 percentage points next year, and by 2.5 percentage points in 2009 and 2010.

Mr. Peduto said freezing the tax at 45 percent was the "wrong approach," arguing that city parking rates would still be too high. Instead, he is trying to get backing for state legislation that would require the authority to lower rates by 10 percent in 2008 and another 2.5 percent in 2009.

He said he hoped the mandated reductions would in turn force private operators to lower their rates to stay competitive.

"We have no authority whatsoever to mandate cuts from the private operators. But if we make the cuts within the parking authority we can help to direct the market," he said.

Mr. Peduto's proposal also would cancel the 2.5-percentage-point reduction scheduled for 2010 and redirect an estimated $2 million in revenue to the Port Authority to fund public transit.

"Because competition is the greatest way to bring down rates, competition shouldn't be based solely on parking garages," he said. "We need to have alternative ways to get into town."

Mr. Peduto chastised the parking authority for not lowering its rates this year when the tax dropped, saying "it's not their money."

"To simply balance the books on the reduction of taxes is bad management," he said.

Mayor Luke Ravenstahl, who appoints the authority's board members, said the agency is offering "the equivalent" of a reduced rate this year by providing six days of free parking to consumers. He said he expects the same to happen next year without the need for state legislation.

"So the notion that's out there that somehow the parking authority did not reduce its rates to comply with the parking tax reduction is false," he said.

Mr. Ravenstahl said that if there is a freeze in the tax rate, he supports the idea of redirecting the revenue to cut debt and boost the pension fund.

He panned Mr. Peduto's proposal to redirect parking tax money to the Port Authority, saying it "screams of hypocrisy" given the councilman's dire predictions about the city's financial future.

"To suggest that we're falling off a cliff financially and simply offering to give money away to a county authority to me just doesn't add up," he said.

Mr. Peduto's proposal received mixed reviews from several state lawmakers. State Sen. Jane Orie, R-McCandless, and state Rep. Mike Turzai, R-Bradford Woods, said the goal of the state-mandated reductions in the parking tax was always to pass along the savings to consumers.

Ms. Orie said that if the mayor and City Council can't coax the authority to reduce rates, she would be "very open" to the idea of forcing it.

"It's such a common sense proposal," Mr. Turzai added. "I would think a lot of people would want to support it. It's consistent with the compromise that I think almost everyone voted for to help put the city back on good financial footing."

State Sen. Wayne Fontana, D-Brookline, said he doubts many lawmakers will support the idea of forcing the city authority to reduce rates while leaving private operators untouched.

"I don't think there's a shot in the world that it will happen. I just think it's political rhetoric," he said.

All three legislators rejected Mr. Peduto's idea of diverting parking revenues to the Port Authority, as did Mr. Motznik.

"Now he's working for the county? He needs to make up his mind whether he's working for the city, the state or the county," Mr. Motznik said. "I think it's ludicrous to dedicate parking tax revenues to the county. They're city parking tax revenues. They need to be directed to the city."

Mr. Motznik said he had no problem with Mr. Peduto's proposal to require the parking authority to reduce rates.

"His needs to pass. So does mine. It's not one or the other. They both can pass and they both can help the city," he said.