City Council considers cutting Philadelphia’s parking tax rate

Members of City Council introduced a proposal Thursday that would set the parking tax at 17% starting July 1, down from the 25 percent levy currently tacked onto parking bills.

Councilmember Cherelle Parker, the majority leader and main sponsor of the proposal, said the main goal for lowering the tax rate was for “some of the benefits to flow directly to the parking workers — either by bringing back laid off parking workers or by improving the pay and the benefits of parking workers.”

Parker also said she hoped the tax cut would bolster the tourism and hospitality industries here and keep the city economically competitive in the region.

Parker questioned whether Philadelphia’s parking tax was hurting the private industry and workers. She noted that the city’s tax is higher than in many other large U.S. cities, including New York City, where it is set at slightly more than 18% for non-residents.

“Now is the time to rethink whether our high [parking] tax rate is a barrier to incentivizing people to return to our great city and to rethink whether such a high tax rate is actually hurting the parking workers we want to help,” Parker said.

A 2019 report found the bulk of the private parking industry’s workforce in the city is Black, earning a median wage of $9.50 an hour, and the majority lack benefits.

The novel coronavirus pandemic upended legislators’ intention to begin reducing the parking tax last year. Instead, they raised the parking tax to 25% from 22.5% as the pandemic inflicted significant economic damage to city finances. The parking tax is scheduled to revert to the old rate July 1.

In March, the city’s parking tax revenue was down nearly 57% compared to the same time last year, according to the Pennsylvania Intergovernmental Cooperation Authority’s monthly tax revenue update.

Before the pandemic arrived in March 2020, the city’s parking tax revenue had reliable year-over-year growth, raking in more than $99 million in 2019.

In 2019, City Council established labor standards for parking workers, which required a “just cause” to fire employees and minimum staffing standards. The legislation passed over the opposition from the parking industry.

Parker’s proposal goes to a council committee for a hearing, which has not been scheduled yet.

Michael D’Onofrio is a reporter for the Philadelphia Tribune, where this story first appeared.