Will Massachusetts Tax Parking Lots to Fund Transit?

Here’s a transportation funding idea that aligns incentives nicely: taxing parking lots to pay for transit.

That’s what one former high-ranking state official is proposing for Massachusetts, ahead of a big announcement by the state Department of Transportation. Earlier this week Governing Magazine looked at the parking lot tax plan, part of a series of policy recommendations laid out by former Massachusetts Department of Transportation Secretary James Aloisi.

A former high-ranking Massachusetts officials says parking lots should generate revenue for the state's transit systems. Photo: ##http://www.kunc.org/post/average-age-american-auto-hits-all-time-high##Kunc.org##

Writing for Commonwealth last fall, Aloisi said the state’s transit system (specifically the Massachusetts Bay Transportation Authority) is in a crisis that will only be solved by hard decision making, and he urged the state’s leaders to resolve it with a series of bold proposals.

Aloisi proposed both a vehicle-miles-traveled tax and a 20 cent per-gallon increase in the gas tax, to be split evenly between transit and roads. But what’s garnering the most attention is Aloisi’s proposal to tax non-residential parking lots and garages with more than 20 spaces and dedicate the revenue to transit. The idea isn’t exactly new. All of these proposals emerged as part of a 2004 study on transit finance, commissioned by the state to fix the MBTA’s still-unresolved budget woes.

Observers are anxious see whether the parking tax put forward by Aloisi makes it into the state’s formal plans. The state of Massachusetts was set to release a new Department of Transportation comprehensive plan this past Monday, but officials have delayed the announcement until early next week.

Shoring up the transit system in Massachusetts’ largest urban area is vital to the state’s economy, environment, and social equity, Aloisi says. And he argues that it’s a mistake to continue funding transit with sales tax revenue — which should be directed to priorities like healthcare and education — and with unsustainable levels of debt:

In a state that prides itself on being a bastion of enlightened, progressive thinking and leadership, we have condoned a transportation funding system that subsidizes automobile drivers, pollutes our environment, and forces unsound land use choices. The dual problem we face – the need to improve mobility and the need to improve air quality in major urban environments – requires solutions that are, at the same time, innovative and practical.

Aloisi is adamant that transportation revenues must come from the transportation sector — and that they should not be unduly burdensome to the state’s lower-income residents.

He proposes to levy the parking tax in special “transit improvement districts,” with all revenues returned to the area in which they were generated in the form of transit improvements. That would benefit affected business owners directly, as improved transit service would help expand the consumer base, he argued. “Proximity to public transportation is a critical public benefit that the private sector can use to reap profits through development that is accessible,” he wrote.

If Massachusetts goes ahead with these recommendations, it could set a smart example for states grappling with how to manage their infrastructure in fiscally constrained times. (Virginia Governor Bob McDonnell, who just proposed shifting the burden of transportation funding to the state’s non-driver and low-income residents might, meanwhile, push through an example of what not to do.)

“I don’t think it’s about a war on cars,” Aloisi told Governing. “Maybe we should have a war on fossil fuels. It’s really (about) the impact of fossil fuels on the environment, on our energy security, and on our ability not to innovate that I think is at the core of the issue.”

  • Jeff

    Baltimore did this to fund its new, free, and reasonably-successful “Charm City Circulator” bus system.

  • Ari

    Not sure about the parking lot tax.  VMT tax seems superior.  Since the VMT tax is more difficult to institute, it will be harder.  Neither will be politically easy.

  • Boulderado

    I like the idea, but think it’s a little unfair to force new construction to create parking spaces via parking minimums, then turn around and tax businesses for having the parking spaces that were required in the first place. This tax proposal has to go hand in hand with eliminating parking minimum requirements.

  • Anonymous

    I feel there is a rational basis for this.  Ideally, things with more externalized cost should be taxed more, and gas taxes are a no-brainer for increased taxes, but it can be argued that parking lots are a public blight and as such should be discouraged via taxes.

  • John Dough

    Hey, if the Massholes want to strangle themselves, I say let them. There are plenty of other places for tourists with fat wallets to go.

  • John Dough

    Yeah. Like smoking, gambling and alcohol. Lets get rid of the blight by taxing the poop out of it. Hey, let’s tax guns and soft drinks and end those blights, too!

    I feel you’re a moron….

  • HamTech87

    It seems like you have to tax parking lots AND eliminate or severely reduce parking minimums in the zoning codes, right?

  • KillMoto

    What’s wrong with a war on cars?
    I’m not a fan on licensing bicyclists.  What I am a fan of, is bicyclists with a license to carry concealed weapons.  So when a motorist wields a 3000 lb weapon at 35 mph, the cyclist can reply with 100 grams at the speed of sound – meet force with equal force. 

    Until all cyclists (and pedestrians) are armed against the threat that has killed on average 100 Americans a day, every day for the last 60 years, I’d say no – nay – never!  There is no such thing as a war on cars. 

  • Anonymous

    Isn’t this a reverse feedback system? If you tax parking to fund transit, the incentives for transit to reduce parking is removed. If transit serves an area better, and fewer parking lots exist, transit gets less funding. That’s the opposite of a financially sound incentive model.

  • moocow

    I can’t believe that Massachusetts calls what they have now a transportation system. They do have an over budget tunnel, but 40 year old train cars barely count as useful.
    Maybe Mass should accept its not a State of “enlightened and progressive thinking” even Ted Kennedy wouldn’t get behind a sustainable wind project. Taxing VMT and parking lots could change this. (when parking lot tax revenue dwindles, figure out another progressive tax stream)

  • Anonymous

    Mr. Dough: would you rather live some place with more parks or more parking lots?  Like alcohol, tobacco, and public flatulance, there’s an anti-social aspect.  On the other hand, I see no such issue with tea.

  • Matt In Sydney

    This is exactly what we do in Sydney, Australia, where $2100 is collected annually per downtown parking space, and $740 in smaller suburban centers. All funds go to the state transport agency to give commuters better travel choices, recently by building better interchanges and park and ride lots at train stations. It acts as a default congestion tax by reducing the incentive to drive and park, but importantly not affecting deliveries and other commercial trips. More info at http://www.transport.nsw.gov.au/content/parking-space-levy

  • Providence, RI

    I’m really excited to see this happen.

    I recently wrote to Whole Foods Market with my idea that they should lead as a company and start metering their parking lots.  The store was one of the leaders on the idea of a refund to customers who don’t use a paper bag for their goods, which is now an idea that’s going pretty mainstream.  I would be ecstatic to find that there was a store that I could shop at that would offer me a cheaper price for my groceries because I had not set them back money in parking.  I think the people who would be turned away by metered parking would more than be made up for by transit- and bike-using customers who want to save some money.

    As I’m sure readers of this blog will know, the cost of an average parking space per space is $15,000, so this is a lot bigger factor in inflating the cost of groceries than free grocery bags.

    Wouldn’t be great to see companies lead the charge on this because they see the writing on the wall?

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