Many folks who park in a Chicago garage or lot will pay more come July under a new tax structure the City Council approved today despite objections from the hotel industry.
Six aldermen, including Ald. Brendan Reilly, 42nd, who represents downtown, voted against taxing on a straight percentage basis instead of the current tiered fee system. Reilly cited concerns that higher resulting parking tabs at hotels could harm tourism.
Also voting against the change, proposed by Mayor Rahm Emanuel, were Ald. Robert Fioretti, 2nd, Ald. Michael Chandler, 24th, Ald. Scott Waguespack, 32nd, Ald. Mary O’Connor, 41st, and Ald. John Arena, 45th.
Parkers at hotels, where the average overnight parking fee tops $40, will see their bills go up starting July 1, when the measure goes into effect. Instead of paying a tax of $5, on average they will pay more than $8, according to lobbyists for the industry.
The Illinois Hotel and Lodging Association noted that the maximum 24-hour tax was $3 in 2011.
Overall, anyone who pays a parking fee of more than $25 for a weekday, $125 for a week or $600 a month will see their parking tab go up. But anyone who pays less than those amounts to park would pay less in taxes, city officials said.
“If you’ve got a premium service, you will pay more,” city Budget Director Alexandra Holt told aldermen this week. “If you’re paying an economy rate, you will actually pay less under our proposal.”
Drivers who pay an early-bird daily rate of $12 during the week will see the parking tax drop to $2.40 from the current $5. But the tax will be higher for those who pay more than $25 to park. For example, if the fee were $35, the tax will be $7 instead of the current $5.
The city plans to calculate parking taxes at 20 percent on weekdays and 18 percent on weekends. Those taxes are now calculated on a tiered, flat-rate system that city officials say confused motorists and parking operators alike. New York charges 18.4 percent, San Francisco 25 percent and Philadelphia 20 percent, city officials said.
Holt did offer one caveat, saying she could not guarantee that parking operators who see their total parking fees decrease because of lower taxes won’t decide to raise their underlying rates to make more money.
“I will caution that we don’t know how the industry will react moving from a flat rate to a percentage rate, so there may be some swing in our numbers,” Holt said, adding that the new plan was designed with the “revenue neutral” goal of raising $122 million to $125 million a year.
Arena said he was concerned about the tax at hotels and suggested that other garage and lot operators with lower rates would increase the underlying fee to a point that consumers would never see any savings.
“Fifty dollars a night for parking (at hotels) is getting to a point where people are going to take that into account in their travel plans,” Arena said of the hotels.
“I see this as sort of a gift to our (lot) operators,” he added, contending they will raise underling fees when the tax rate is lower. City parking rates are getting to a point at which “the cost of shopping here or coming to visit is getting to unsustainable levels.”Copyright © 2015, CT Now