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Point of View

Reporters, Australia, Taxes vs. Fees

By John Van Horn

Got my quarterly call from the LA Times. An agenda-driven reporter was looking for some pithy quotes backing her posit that Los Angeles was slowly falling into the sea because there simply wasn’t enough parking and that instituting market-based pricing in some areas would mean that the poor could no longer drive their cars.
By the time our conversation was over, I think the reporter thought she had dialed the wrong number.
I calmly and coolly took her through the problems that LA faces. Since I know the city personally, she had difficultly telling me there was no parking in certain areas. The fact is that there is no “convenient” or “free” parking in those areas, but if you want to part with a few bucks, there’s plenty of parking. Whoops –
She did ask why everyone thought parking should be free. My answer was that since it had been subsidized from the beginning, most folks thought that was how it was. Cities didn’t charge, or charged minimally; companies paid for their employee’s parking; shopping malls paved over acres and provide parking free to their customers. So now when they want to charge for parking, or to raise prices to fit the marketplace, people rebel.
I explained that if, however, they took the money from parking and plowed it back into the neighborhoods, rather into the mayor’s limo or other important parts of the general fund, people would see that parking fees did a lot of good, and would begin to understand that paying a fee to use a piece of land was a good thing, not something bad.
The result would be less congestion (people looking for free spaces), better streetscapes, more money for merchants, better business and, well, just a better world in which to live.
I’m not sure the reporter bought it, but she did say my position does turn conventional parking theory on its head.
Oh, I asked her how it was that poor people who could afford a car, gas, insurance, maintenance and the like couldn’t afford the cost to park the car and needed a subsidy. Strangely, she didn’t have a response.
I’m not holding my breath waiting for the story in The Times.
***
I spent a week in Australia on business. Yes, parking business. I should be able to tell you all about it next month. A buddy there showed me an article from the local paper. They are considering a type of congestion pricing but with a twist. It’s run by GPS, and your car is monitored at all times.
If you drive through a congested area, you will be charged for driving in that area. Whatcha think of that? It gets better: Your parking also can be monitored and charged. It gets even better: Your speed can be monitored, and they will e-mail you a speeding ticket. And it gets even better than that: The information can be sent to your insurance company and your premiums can be based on your average speed, or whatever.
Now the city of Melbourne admits that there are some “privacy issues” and is studying the idea. Privacy issues? You bet there are privacy issues. And beaucoup other issues as well. The Australians are smarter than this. I am fairly certain the idea will die a proper death.
***
There have been a number of articles in the mainstream media lately describing local city councils raising parking fees. They are similar in one aspect. The rise in on-street parking pricing has absolutely nothing to do with availability of parking, need for parking, or the number of cars needing parking at a particular time.
If you read between the lines, the rates are set based on the revenue they will produce. In other words, they are a tax, not a fee.
Fees are based on providing a service. Say, for instance, you put a new room on your house. You are charged for a building permit. In exchange, the city comes out and inspects the project to ensure that the roof won’t fall on you.
The same is true for fees charged to gas stations, restaurants and the like. They make sure you get a gallon of gas if you pump a gallon of gas, or that the rats are kept to a minimum in the kitchen at the newest five-fork dive in town. Seems like a good exchange.
Parking charges should be the same. You pay for the parking, and the city ensures that the spaces are marked, rules are followed and space is available when needed. By altering the prices based on supply and demand – in other words, the free market – those needs are met.
In lots controlled by private concerns, this happens daily. Rates are changed based on how many empty spaces are in the lot, what is going on in the neighborhood, and what the traffic will bear. If the lot gets too full, the owner raises the prices. If it’s too empty, the prices go down. Goldilocks pricing at it finest.
However, on-street pricing is set by a city council that is looking not to preserve spaces, make the parking more convenient to parkers or lower congestion, but to line city coffers. How many city council members have you heard say, “Gee, if we raise the charges a buck an hour, it will increase our revenue $5 million a year. Let’s do it.”
Charges for on-street parking have moved from a fee to provide a product or service to a tax to fill the city’s general fund. Just another way to raise money to be used for things other than those that are parking related.

See you in two months. The next issue of Parking Today is our “People in Parking” directory, the industry’s phone book and yellow pages. No editorial matter. I get a month off. See you in September.

Article Abstract from July, 2008




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