Why Miller’s Parking Tax is a Bust

On 20 March 07 I wrote that Miller’s proposed $100 per-parking-stall tax is regressive, does nothing to manage congestion in consequence “is simply a wasted opportunity.”

Darren J, an advocate of doing something constructive about congestion, wrote:

…I agree that a parking tax that small is useless… Do you think a much larger parking tax (more than 35 cents!) would have an impact on car use, and could be used as a first step before road tolls? This seems to be the direction Toronto is heading.

First of all Toronto is not heading in any direction in terms of managing congestion. Rather, it is stuck in it own headlights. If there is no plan to deal with automotive congestion then what will happen is that it will get worse. I point out this plainly obvious fact because we have acted for the past 20 years as though congestion will eventually go away, like a lingering cold might do.

The last 25 years of transit history of this city is abysmal and the new six-billion-dollar-15-year plan (let’s say it will be built just for this paragraph) will not keep up with the projected population over those 15 years anyway. Giambrone’s proposal (and god bless him because he will likely be our mayor in 12 years) is far overdue. This is only catchup. Biology, migration and economics will overwhelm Mr Giambrone’s plan as it would defeat any other large-city leadership without a full-blown transit strategy. Toyota’s product will always trump Siemens’. So by now – by the 21st century – a transit strategy includes another half of the equation – road user charging.

Sorry… back to Darren’s excellent question.

Would a larger parking tax impact car use?

Yes, there is a level of taxation that would have a meaningful impact on car use. A high flat tax would naturally have an effect, as does London’s nasty $16 per day congestion charge. A flat tax is a blunt instrument in both of these cases. Miller’s too-small tax will have no effect (except to raise $7.2M in pocket change for the city). If he made it way bigger it would essentially reserve parking for those that can afford it (i.e., discriminate specifically against the less-advantaged.) What I am asking for is to discriminate against those who drive in peak hours (regardless of wealth). Because some of those who do not wish to pay the increment will drive at a different time or arrive via a different modality. That reduces congestion AND raises money for the city AND is fairer, because it does not single out the underprivileged.

This is really simple. Think about the early-bird signs on the private parking lots? “In by 9am pay $10.00 else $20.00”. This is done because the private operator wants to be sure to sell his inventory. But what if Toronto Parking Authority (GreenP) charged “landing” and “departure” fees? $10.00 to park, plus $5.00 if you arrive between 8:00am and 9:30am; plus $5 if you depart between 4:00pm and 6:00pm. And what if the city imposed such a surcharge on all private operators, including employers who provide free parking. And what if it covered surface lots, garages and street parking? Yes this is a more complex scheme. But I guarantee you that it would raise more than 7.2M, would spread rush hour peak, would push a portion of motorists people onto transit or bike (this plan would require more busses and better bike paths immediately). And it is possible to deploy.

What is missing besides political will is that many parking operators would have to scramble to upgrade their payment systems to handle the necessary audits, so the city would have to allow those operators to keep some of the additional revenue to pay for the upgrades.

Could Miller’s flat per stall tax be used as a first step toward toll roads…

No, not the way it is proposed. Why? It is unrelated to congestion; it is a regressive, aimless tax, which merely exhausts the motorist and reduces her tolerance for the next tax to be levied. Tax payers are not completely stupid. Smokers complain there are taxes on cigarettes, but they understand why they are so high. Motorists do not like to pay all their lunch money per half hour to park underground in the central business district, but they understand the real-estate is valuable. But many motorists who feel little choice but to take a vehicle downtown don’t want to pay a surtax that is unrelated to the service received. I don’t.

But, if I had to pay a surcharge to arrive during rush hour (and I would not like it), I would understand it. Best of all I might be able to avoid it. That is what a tax should do; it should elicit a desired avoidance behavior. It should make a proportion of the population stop smoking or come to work earlier, or wait until 10am to drive downtown to shop, or take transit twice a week.

In fact, if we were to charge a landing and departure fee for parking, and could make it apply everywhere, in appropriate gradations ($5 downtown; $2 in Etobicoke), then we would not need road user charging, would we?

When you consider parking and road-use within the same brain you will find whole new solutions.

1 comment:

Darren J said...

I should point out that reducing congestion is not my main priority. I would like people to make better use of our infrastructure and resources, and have a better quality of life. Reducing congestion is an important piece of the puzzle.

It's true that the parking tax is more blunt than ideal, but I would assume that the person who parks somewhere for lunch would pay a proportional amount of the day's $5 (for example). It won't do anything for the people who stagger their workday either, but it would make everyone take a second look at leaving their car at home.

I talk to people in North York who compare the price of parking to the price of transit. Parking is cheaper so they choose to drive. This can't be uncommon. For some people, the threshold will be different depending on convenience and other factors.

Your landing fee idea makes sense, but would be more complicated to implement.

For any road pricing scheme, the first people who stop driving are going to be those with lower incomes. That doesn't make it wrong, as long as people have other transportation options. People may still choose to drive once in a while, if they can afford it.

By the way, the Star is reporting that Toronto is coming out with an environmental plan later today. There is talk of road tolls, but it will likely remain just talk.