Many folks who park in a Chicago garage or lot would pay more come July under a proposal the City Council Finance Committee endorsed Monday despite objections from the hotel industry.
Anyone who pays a parking fee of more than $25 for a weekday, $125 for a week or $600 a month would see their parking tab go up under Mayor Rahm Emanuel's proposal that's set for a full council vote Wednesday. 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. "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 would 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 would 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.
Hotel operators, meanwhile, said overnight parkers at hotels would be hit too hard by the new rates. The average overnight parking fee at a Chicago hotel is $42.31, and hotel owners said the tax on that tab would be $8.46.
"The percentage has a severe effect on our hotels and the overnight guests who stay there," said Marc Gordon, president of the Illinois Hotel and Lodging Association. He also noted that the maximum 24-hour tax was $3 in 2011.
"These are the guests who come in and spend in our hotels and spend their money in the city and pay the taxes and do all the good things that have a tremendous effect on our city's economy," Gordon said.
But Ald. Jason Ervin, 28th, said hotels could simply charge less for parking, even after Gordon explained that hotels have to pay for valet parking.
"I just think that the amounts I've seen at some of these hotels are just ridiculous," Ervin said. "I think that probably has a greater detriment — just the outright rate — than the taxes being charged on the parking itself."
Ald. Brendan Reilly, 42nd, whose ward includes most of downtown, told the Tribune in an email that he was "100 percent opposed" to the proposed parking tax structure.
"It will result in a 69 percent tax rate hike on overnight parking in hotel garages and provides a two-tier rate for public garages that allows them to raise their lowest base parking rates on parkers without triggering the highest tax rate," Reilly said.
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