Vote Yes on Proposition E for a more livable San Francisco!
On November 7, San Francisco voters get a chance to vote yes on Proposition E. Prop E is a 10% increase in the city's parking tax, which also closes a loophole in the current law that exempts valet parking from the current tax.
Proposition E is good for San Francisco, and advances our goal of a more livable city. It will fund Muni and other city services, encourage commuters to walk, bicycle, and use public transit, and reduce congestion, pollution, and greenhouse gas emissions.
Proposition E will:
- Generate revenue for Muni and other city services. The current 25% parking tax raised $55.18 million in the 2005-2006 budget year, of which $33.12 million went to the general fund, and $22.06 million went to MTA. The controller's office estimates that Prop E will generate over $26 million per year for MTA and other city services, including public safety and emergency services, street and infrastructure repair and maintenance, and senior services.
- Ask commuters and visitors to pay a fair share of city services they use. Unlike many San Francisco taxes and fees, the parking tax is shared by residents and non-residents alike. A recent study found, for example, that 62% of monthly parkers in city-owned garages downtown reside outside of San Francisco. Prop E asks residents and visitors who drive to the city to support the city services and infrastructure they use.
- Result in reduced car traffic and safer streets. Research indicates that a 10% parking tax increase results in a 1-6% reduction in parking demand, with a 3% reduction being most common. Less car traffic means safer streets, with fewer pedestrian and bicyclist injuries and fatalities.
- Not prevent anyone from making their trip. People can continue to drive alone and pay the small increase themselves, or they can carpool and split the cost of parking, or they can avoid the tax altogether by shifting to other modes for many of their trips. In other words, a parking tax is one of the few taxes that people can choose to opt out of.
- Exempt residential parking, metered parking, neighborhood parking permits, and hotels. Prop E does not affect neighborhood permit parking or parking meter rates. Hotel parking is taxed at the 14% hotel services rate.
- Do no harm to tourism or patronage of cultural institutions and restaurants. Consider a motorist with one passenger who currently pays $10 for 4 hours of short-term parking for an evening out ($8 to the parking operator and $2 for the current tax). Raising the parking tax to 35% would raise the cost of parking to $10.80, only $0.80 more. This works out to $0.40 each for the 2 people in the car, or just $0.20 each if there are 4 people in the car. No one can reasonably claim that $0.80 will determine whether tourists decide to visit SF or whether SF residents go out for dinner and a performance.
- Not impose an undue financial burden on working families. Unlike a sales tax, people can ‘beat’ the parking tax by carpooling, shifting to other modes, or combining trips. For those who must drive, their increased parking costs will be relatively small compared to the increased tax burden of raising the sales tax. Consider a person who absolutely must drive to work and pays $100 per month to park ($80 to the parking operator and $20 for the current tax). Raising the parking tax to 35% would raise the cost of parking to $108, only $8 more per month, or $96/yr. This works out to $0.40 per day if the person continues to drive alone, or just $0.20 per person per day if s/he begins carpooling with a co-worker. On the other hand, every household that spends $1,095/yr. (~$90/mo., or $3/day) on taxed purchases in SF (all goods/services except rent, groceries, prescriptions, & utilities) will pay $96/yr. in total sales taxes if that tax is increased.
- Support retail businesses. About 43% of public off-street parking spaces in SF are sold as monthly parking for commuters. Studies show that since long-term monthly parking is more expensive, a higher parking tax causes some commuters who drive to shift to other modes. This frees up many spaces for short-term parking used by shoppers, creating more parking capacity without building more parking garages.
- Reduce air pollution. A study of 8 California employers who began charging for parking found an 11% decrease in solo driving and a 12% decrease in vehicle miles traveled, resulting in an overall 12% decrease in air pollution caused by their employees.
- Provide a disincentive for scarce land being tied up in an undesirable and economically unproductive land use. Parking lots and garages are unsightly, can become crime ‘hot spots,’ and make no economic sense in a city with relatively high real estate values and housing costs.
- Be the only new revenue source under consideration that is socially progressive, will not slow economic recovery or be perceived as a ‘jobs killer,’ and is environmentally-beneficial. Sales taxes are relatively regressive and can’t be avoided (except by making fewer purchases in SF). Payroll taxes or gross receipts taxes could be perceived as ‘job killers.’ And none of these taxes have the positive impact on the environment that the parking tax does. As any economist will tell you: good public policy is to raise taxes on those activities you want to see less of, not more.