Inquirer Editorial: Parking industry shouldn't get a tax cut

At a time when city services are, at best, stretched and revenues falling, Philadelphia can't afford to give a tax break to parking operators at the expense of others.

In spite of Mayor Nutter's plans to cut business taxes in 2014, City Council voted to single out the parking industry with its own 3 percent cut. The city can't afford to do this, especially when tax revenue slipped $5 million below projections in July and August. Officials are now discussing budget cuts to compensate.

At 20 percent, the parking tax is high, and it is understandable that Councilman James F. Kenney would sponsor a bill to gradually reduce it. But there are no guarantees that anyone but the parking industry would benefit from it, because there are no provisions in the bill to pass the tax savings on to customers.

Worse, tax policies that favor one sector over all others when everyone is hurting perpetuates, rather than fix, a broken system.

In 2008, the city brought the parking tax back to its 1986 level of 20 percent, following the 2003 Tax Reform Commission's recommendations. Philadelphia hoped to use the additional funds to repair roads, plant trees, and encourage residents to use mass transit. But a gaping budget hole forced it to trim those plans.

Other taxes - including a one-year, 9.9 percent property tax hike - have since been raised to bolster city services. Residents and businesses rely on those services, which include public safety, health centers, recreation, libraries, trash pickup, infrastructure care, and economic development.

The parking industry, in particular, has benefitted from taxpayer investments in the Convention Center and the tourism industry, which has helped attract visitors who use its facilities.

The industry has offered some creative answers to revenue questions. Arguing for the tax cut, Parkway Corp. President Robert Zuritsky said his Philadelphia Parking Association identified more than 100 rogue parking lots that weren't paying taxes, properly zoned, or licensed.

Since 2009, the city has collected $750,000 from many of those illegal operators, who now are licensed. Some just went out of business rather than bring their lots into compliance.

Zuritsky says if the city audited the lots and garages it could reap even more tax revenue. A private auditor could work on a commission basis, sparing the city up-front costs. That's a good idea. It should be considered in talks aimed at streamlining the tax system.

But given the bleak revenue trends, which have been caused by a weak economy, the mayor should continue to work with Council members eager to restructure the city's tax system and come up with creative, affordable solutions that help everyone, not just one type of business.