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Municipalities consider controversial parking-space tax

| Thursday, June 5, 2008

The Allegheny Institute for Public Policy recently criticized Robinson officials for exploring a tax on parking spaces -- a move the commissioners recently tabled, as did officials in adjacent Moon.

"When times get tough, they hatch new plans to tax the very development they tried so hard to get in the first place," wrote Allegheny Institute policy analyst Eric Montarti of Robinson officials.

Faced with rapidly rising costs for such line items as fuel and employee benefits, some Allegheny County municipalities are looking at taxing parking spaces as a way to help balance their budgets.

Robinson Manager Richard Charnovich denies that the parking space tax was considered simply because the township's health care costs are increasing.

"They (The Allegheny Institute) made it sound like that's the only reason" Robinson officials looked to assess owners of spaces' $100 per space annually. Charnovich said developments such as The Mall at Robinson and Robinson Town Centre require the township to put in at least $200,000 to $250,000 worth of improvements every year.

Robinson has several other strip centers and free-standing commercial stores. Robinson mall officials did not return repeated calls for comment.

"It's a four-lane highway, so it's heavily used," Charnovich said of roads servicing the mall. "And there are ever-increasing costs of police protection, with car break-ins, shoplifters."

Charnovich said the township is locked into a contract that makes it difficult to amend the proportion of health care costs the township provides. Robinson officials hope to revisit the contract with employees, whose health care costs have skyrocketed in recent years.

"We weren't expecting anything like this," Charnovich said of the increase.

To meet the expenses of the township, Robinson Commissioners raised taxes, from 2.65 to 3.05 mills, which is still "one of the lowest in Allegheny County," Charnovich said. He said the commissioners tabled the parking tax proposal until he and township solicitor Samuel Kamin can gather more information about it.

Officials in Moon, which has several hotels, two strip shopping centers and several office parks and other commercial concerns, also considered a parking space proposal earlier this year.

"We're basically watching them to see what happens," said local attorney Alan Sable, who represents developers seeking to build a Wal-Mart in Moon.

The proposed new Moon ordinance was based on one Ohio Township officials enacted in July 1996, preceding that municipality's large commercial developments by about a decade. Ohio Township Manager John Sullivan Jr. emphasized that compliance was discussed with the developers in each case and "does not affect mom-and-pop businesses" because the annual tax of $125 per parking space doesn't apply to businesses with fewer than 125 spaces.

As part of an agreement with Ohio Township, the parking tax proceeds go to a tax increment financing plan to help pay for $7 million worth of infrastructure improvement bonds.

In a memorandum to Moon officials, solicitor Michael Santicola said the proposed tax has the potential to generate close to $1 million a year for the township based on businesses with 125 or more spaces, identical to Ohio Township's threshold.

Moon's professional staff has shared issues for the supervisors to consider, including whether Moon could justify the tax as reasonable.

In most cases, "the parking tax significantly exceeds the real estate tax on commercial developments in some case eclipsing the total tax burden to all taxing bodies," township staff wrote in a memorandum.

"Businesses could say it was an excessive tax," said Moon Assistant Manager Jodi Noble. Township staff wrote such a tax "could have a chilling effect on businesses."

Homestead has a parking tax, but the amount is $20 per parking space that commercial businesses own.

Moon has a 6 percent tax on each parking transaction within the township, a holdover from the days when several parking lots served travelers using the former Greater Pittsburgh International Airport. Township staff questioned whether the tax would be duplicative. Moon still has one parking business, Globe Parking.

Other issues presented by the Moon staff included how to justify the 125-space threshold for businesses, as a business with 124 spaces would pay no parking tax, while another with 125 spaces would pay $12,500 each year.

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