Can the Portland Bureau of Transportation manage its budget deficit while also working to shift the city’s transportation system away from reliance on fossil fuels? With its new revenue strategy, that’s exactly what it’s aiming to do.
As we’ve explored in the past, PBOT’s reliance on parking fees for revenue has been financially and environmentally destructive. It has created a catch-22: If PBOT wants to reduce Portlanders’ vehicle miles traveled (VMT) and curb carbon emissions, they’ll need to fund programs and projects that encourage options to driving cars and trucks. But in order to pay for them, they need parking revenue.
“This is an unsustainable situation,” said Portland Commissioner Jo Ann Hardesty, who heads PBOT, at the February 23 City Council meeting where she and her colleagues voted to pass a new revenue strategy to address it.
The near-term solution, according to PBOT, is its “Bridge to the Future” proposal. Here are the core policy measures, followed by key slides from their council presentation:
A parking “Climate and Equitable Mobility” transaction fee of $0.20 added to metered parking transactions starting this summer to “send price signal to drivers about the costs of driving and support investments in transportation affordability and access.” Staggered parking permit increases beginning this year to achieve cost recovery. Performance-based parking and inflationary rate increases starting in 2023, which will bring base meter rates up $0.40 per hour to adjust for inflation, and adjust rates in the future to account for demand and inflation.
Parking revenue currently accounts for 35% of PBOT’s annual discretionary revenue and rates have not been increased since 2016. And unlike the Water or Environmental Services bureaus, PBOT does not increase meter rates with inflation. The agency had cut their budget to the bone even before Covid ravaged it with an estimated $88 million in lost revenue.
The Budget Office estimates the new on-street parking fee will generate about $2 million per year and it will go directly toward programs that encourage people to walk, bike and take transit (like PBOT’s Transportation Wallet program). The rate increases that will start in 2023 are expected to generate $24 million in gross revenues.
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But there’s a bigger picture to see here beyond new revenue. As urban transportation reformers will tell you, parking has long been subsidized in order to hide some of the external costs of driving a single-occupancy vehicle. With this parking fee, PBOT wants to capture those externalized costs and explicitly remind drivers about them.
A Portland Mercury article from last week summed up the approach and asked Tony Jordan from Parking Reform Network what he thinks about it:
For people whose primary form of transportation is driving, these fee hikes may seem sudden and pricey. For parking reform advocates, the price increases are a baby step in the right direction.
Tony Jordan, director of the Parking Reform Network, sees parking pricing as a key tool to combat car dependency. To Jordan, an adequate parking price is one that equalizes supply and demand. Ideally, according to Jordan, there should always be one parking spot available on a block or a given parking area. That way, there is always a spot available for the driver who needs it, but not so many spots open that the wide availability encourages people to drive because it’s so easy to find parking in the area.
In populous shopping areas like NW 23rd Avenue, achieving that equilibrium might mean $3, $4, or $5 per hour—whatever it takes to leave space available for people who have to park in the area while encouraging others who have the option to walk, bike, or ride public transit to do so. According to Jordan, if parking spots were priced at their market-rate value, it would illuminate the true cost of driving and foster a larger shift towards public transportation, triggering greater investments in public transportation due to the increased demand.
“We use market pricing for a lot of things,” Jordan said. “It’s weird that parking is where people draw the line.”
After these near-term programs are implemented and PBOT achieves some budget stability, it will start looking to mid-to-longer term plans for being able to stay on its feet without the help of parking fees. This may include things like property or payroll taxes going to transportation projects instead of revenue coming solely from transportation or right-of-way use fees.
It’s amazing PBOT was able to get a parking rate increase through council without attracting opposition, especially amid record high gas prices. If it’s to have the desired impact, and continue to avoid controversy, we’ll have to make sure alternatives to driving are as competitive as possible.
Thanks for reading.
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Tax the poor!
Another regressive tax that will hurt the working class all so CoP can pretend they are concerned about the climate. Increasing costs for people who have no other option because of our dangerous and broken roads is pretty gross.
The city that owns the only publicly owned car racetrack in an urban area wants you to think they care about climate change.
Good point about PIR (Parks Department) and how that fits into the climate lense.
I live in St. Johns. I could take a bus to run an errand. It’d turn a 40 minute round trip drive into probably 2.5 hours depending on if I get lucky with the bus schedules.
I used to ride my bike downtown to work, but I wouldn’t blame anyone who wouldn’t want to do that. Without riding all the way to N Williams, your options are the death lanes on Highway 30, the death lanes on N Greeley, or the death lanes on N Interstate.
Low income folks are frequently time poor as well. Asking them to spend 2-3x the amount of time to run an errand is obscene.
No one is going to change mode based on this regressive tax. It’s just going to cost low income folks more. Taking transit or biking from the outer neighbors is both dangerous and a massive time suck.
Why don’t we build infrastructure that actually empowers people not to drive first and then create disincentives to driving? Things like tolls or more expensive parking are just regressive taxes when there is no reasonable alternative to driving.
How about we tax the virus under the guise of equity?
Don’t forget about the investment in climate and diversity justice.
There has been plenty of funding for public transit, its just been squandered on slow, fix railed trolleys that are barely used relative to their cost. Look at the SW Corridor, absolutely rejected by the voters, including the voters who it would immediately serve, and yet TriMet is still chugging along on the land development project to build low-speed commuter trolleys to the affluent suburbs.
Bikes are the same stories. We wouldn’t need stuff like Better Naito if PBOT wasn’t adamantly opposed to reducing motorist through traffic on greenways. Our ‘bike infrastructure’ is expensive because the key value when designing it is to make sure motorist speed and access isn’t impacted at all.
Further, I recognize that this new regressive tax has nothing to do with climate change, but PBOT is still pretending that it does. I’d suggest not paying for new infrastructure off the backs of folks who have been priced out of the city center or city all together. Regressive taxes and tolls are tone deaf. They wont change mode share in the slightest. I’d suggest that the advocates for these regressive taxes just be honest about why they support them and what their goal is.
Let’s debate. You know where to find me. You can tell me what you think I believe and why you think I believe it, to my face.
So much testosterone and so little argument.
Data demonstrate driving and car ownership are related to wealth. Most car-less households are among the bottom fifth in income.
By and large, the poor aren’t driving downtown (with $5/gallon gas or without) and having to pay for parking. They’re bussing, walking or biking – or, more likely, not going downtown.
Opposing parking pricing on equity concerns is misplaced, and by and large something done by the wealthy and privileged to protect their subsidized driving. Right now the poor who don’t drive are subsidizing the wealthy who do.
Ah yes, the poor are walking from their $1mm bungalow in Buckman. Makes perfect sense.
The places with high cost of living are also the places with high walk scores and bike scores. What’s the bike mode share in Lents?
What a bad faith comment! But I’ll play ball. I probably pay for metered parking in Portland ~5 times a year. I drive maybe once a week on average.I’m not particularly worried about an extra $1 a year in meter costs.
Now, I have friends who live in east county. They drive daily and to most places because everything is far away and they don’t have sidewalks in their neighborhood. Climate activists are frequently completely out of touch with reality but you’ve got to be very far out if you honestly think that asking the question ‘Should driving in Portland be more expensive?’ is going to get more favor-ability in Lents & Portsmouth than in Alameda or Irvington.
You have a weird conception of what ‘poor’ is. Most households in Oregon own cars. The people who live farther out where our more affordable housing stock is are more reliant on cars. My neighbors in St. Johns & Portsmouth aren’t the poorest but they sure aren’t rich. A huge chunk of our population is drowning with the cost of living going up. Most of the city doesn’t make enough to live comfortably here. They are going to feel the burdens of these new regressive taxes. I’m not. The affluent central city isn’t.
Easy tiger, the wealthy subsidize the poor in just about all aspects of our society, picking individual line items is disingenuous at best.
This is the first I’ve seen anybody claim the wealthy so broadly subsidize the poor. Would you please explain how that’s true?
In OR the top 20% of wage earners pay 68% of income tax revenue (top 30% pay 85.9%). Of course income taxes aren’t everything, so there are also real estate taxes, capital gains and estate taxes at play. Real Estate taxes are based on the value of one’s home and unfortunately in OR, municipalities are benefitted by promoting new development so that the RE taxes are calculated at current market value, not the arbitrarily lower value due to Measures 5 and 50. Obviously, new development is expensive, so those with higher incomes are buying those new homes and paying those RE taxes that are far higher than the majority of other homes, even those at similar sales prices. Capital gains are taxes at regular income tax level, so that just adds to the current income taxation. We also have an estate tax that starts at 10% for estates over $1MM. What’s worse here, is that no one can say there is a regressive sales tax at all. Suffice to say, the wealthy and high earners subsidize revenue to provide a considerable amount of services, particularly to those within the lowest income quintiles.
PS, you’ve gone from “wealthy” to “wage-earners.” A wage earner falls into the “labor” category; most “wealth” is owned by investors–capitalists. Capital vs Labor.
Remember this line from the movie “Wall Street?”
“A $400,000 a year working stiff, flying first class and being comfortable.” That person is high-paid labor and pays about 28% in federal income tax. On the other hand, the richest 400 individuals–the biggest capitalists–pay only about 8% federal taxes. I recommend punching up, not down.
The obscene and growing wealth inequality in this country has meant that people in the upper 0.01% income range have made out like bandits since 1980; the upper middle class has kept pace with US economic growth; and the middle class and poor have fallen behind. David Leonhardt has an article with a very good graph showing this: https://www.nytimes.com/2019/02/24/opinion/income-inequality-upper-middle-class.html
So saying that upper income people subsidize the lower 90% is blaming the victim for policy that has impoverished them.
If you want to get into the weeds about federal income tax, I’ve linked to a white paper below.
https://www.whitehouse.gov/cea/written-materials/2021/09/23/what-is-the-average-federal-individual-income-tax-rate-on-the-wealthiest-americans/
That 8% rate you cite is not so cut and dried, and is mostly a matter of definition.
I would never link to a WSJ opinion piece, but this article explains it well:https://www.wsj.com/articles/is-the-income-tax-rate-on-the-rich-8-or-23-depends-on-whose-math-you-use-11633874400
[When I went there the first time, I could see the article; doublechecking the link it was behind a paywall. Your mileage may vary.]
Not punching down at all, just pointing out that whether the source is wealth or income, the likelihood someone too poor to own a car is subsidizing anything is very unlikely.
Probably important to note too that many millions of people in the lower 90% are not by definition impoverished, they may wish they got paid more than they do, but the majority don’t live in poverty. Interestingly enough, many folks in the bottom 90% spend more money when they feel rich because their 401k has ballooned in value, not that that is wise, but it isn’t just the wealthy capitalists paying attention to stock prices and behaving a certain way.
Regardless, part of the reason we are having this discussion is due to artificial wealth redistribution, granted in this case we have borrowed from our kids and grandchildren to pull forward years worth of consumption and now we’re paying the collective price for that with higher costs, parking included, that are not likely to moderate quickly nor be offset by wage growth.
This so very wrong.
Capital gains for the vast majority of home sales are tax free. And capital gains for speculative stocks/equities and other financial assets are also tax free for the first $81,000 of gains (for a two person household). Even worse, the maximum capital gains tax rate is no higher than 15% for people selling up to 0.5 million dollars in speculative assets. Contrast this with the income tax rates that working poor people pay and get back to me.
Boo hoo.
Your ability to be so sure you’re right, that you’re completely blinded by not knowing what you don’t know, is truly just so impressive.
A couple things:
Most of us here live in Oregon. This is a state in America that has a very progressive tax structure. You’re right, in America there is a federal capital gains tax, but I am guessing (by the inaccuracies in the post above) that you are maybe not aware that we also have a state capital gains tax. The federal short term capital gains tax is taxed at the top marginal tax rate for the filer. The long term capital gains tax is at 0%, 15%, or 20% depending on the income level of the filer. Unfortunately, no, the feds don’t give you a free ride on the first $81,000 worth of gains, they don’t tax you on long term capital gains if your income is less than $81,000 (married, filing jointly). The state capital gains tax, being pretty progressive doesn’t equivocate between short term and long term, they just consider it income and tax it as such.
I can tell with the research you did into the various tax structures this next part is going to going to be rather troublesome. In the state of Oregon, the lowest 20% of wage earners (i.e. the working poor as you so eloquently call them) paid on average $161 in state income taxes in 2018. The top 20% paid on average $15,313. At the federal level, the lowest quintile pays no effective taxes as the standard deduction and tax credits make them net beneficiaries. So yeah, boo hoo.
https://www.oregon.gov/dor/programs/gov-research/Documents/or-personal-income-tax-statistics_101-406_2020.pdf
Please google “marginal tax rates” and avoid posting about things you don’t understand.
Or maybe take out the onstreet parking for most of downtown? Or maybe every other space? Or every third space? Seems like that’d reduce car trips.
“Ethel, we had better ride our bikes because it’s impossible to find a parking spot or pay $20 in a lot downtown now.”
“Fred, that’s true, and it’s so much nicer and safer without all that car traffic.”
I think it will be more like Ethyl, let’s skip going downtown. It’s a pain in the ass.
Or, you might wind up with more people circling downtown trying to find a place to park. Thus, burning more fuel, increasing traffic and causing more frustration.
I disagree with Tony Jordan’s assertion that an increase of demand will translate into investment and reform of public transit. I think it’s much more likely that the burden of people wanting to travel without paying more for parking will fall onto rideshares. Public transit is ineffectual for meeting schedules and difficult to plan around as it likely means doubling or tripling time for transit; where Uber, Lyft and the like only add a few minutes. I believe most will defer to using it over Trimet despite being more expensive than parking in the long run. Further concerns include crowding and cleanliness.
I’m glad to hear that the money from this will go towards supporting travel alternatives and would like to know more on those specifics as they are developed, as it seems much money can be lost to admin costs and planning. (I’ll think this is great way to help make BikeTown FREE) I hope that Trimet takes the initiative to make the changes necessary to provide something more desirable than rideshares and prove me wrong.
Pessimistic, I’ll hop on here with my experience. I was downtown yesterday morning, took the bus to the transit mall hoping to transfer to something that would get me to Sellwood (Tacoma). No can do at 8:00 AM! The next bus that direction arrived after 3:00 PM. (I could have taken three buses–one to the east side and a third going south, but wasn’t willing to.)
I ended up taking an Uber to the Sellwood bridge. Transit/density/funding are a Gordian knot that I have no idea how to solve.
I would rather not drive/park because I don’t like being tethered to a car, so my personal strategy is to take my rush hour only bus one-way and Uber home.
BTW, downtown is a ghost town, few people on the streets, not much traffic. But looking cleaner than three months ago.
The knot is called capitalism.
(And regressive parking fees that disproportionately target lower-income/wealth metro Portland residents is an example of some of the worst aspects of capitalism.)
I wish I could say I was wearing my Elizabeth Warren t-shirt, but it’s in the wash.
Thanks for the input, to clarify I had meant concerns for crowding and cleanliness in regard to public transit. Despite their(Trimet staff) best efforts, I know quite a few that regard busses as questionably clean at best and avoid using them on that premise alone.
I agree that it’s a problem I don’t know enough to solve. Off to read John and Taylors articles on future input to Trimet and transit maths, perhaps I’ll end up less pessimistic for it.
For anyone else reading this down the line, I found both of Taylors write ups to be insightful and thought it may be helpful to link them. (also apologies to Jon for misspelling your name)
https://bikeportland.org/2022/03/10/the-modal-math-crunching-costs-of-biketown-vs-trimet-vs-driving-a-car-350031
https://bikeportland.org/2022/03/10/trimet-wants-your-input-on-deep-look-into-future-of-bus-service-349940
With a 40% drop off in parking fees* and thus demand, this looks like a great time to allocate curb zone space for rapid bus lines, PBL and shared parking (bike corrals, scooter nests, bikeshare docks, cafe tables, etc.)
[*assuming a linear relation to utilization…vs just not collecting fares / theft etc.]
Woohoo! Another city revenue stream to siphon off for housing, police, parks, and pet projects, just like the Utility License Fee (for ripping up streets by utilities) of past years!
I swear, there is a checklist of “intersectionality” words the city uses when trying to craft any policy. Just call it what it is – a fee increase.
This is a good policy & the right decision (& not steep enough IMO) but wow is “climate and equitable mobility“ terrible branding. It’s a fee increase because we are undervaluing a public good. How about “paying your fair share” or “right-price parking?” That’s what it is. Using other words just primes people to equate “equity” or “climate” with “worse service” and/or “more expensive.”
Trying to sneak in fee increases under the guise of “climate” or “equity” will only undermine the value of those words for policies that actually address those issues.
Yet another cash grab. The money will go into a black hole.
If Performance-based parking launches in 2023, it will be over seven (!) years since City Council directed PBOT to develop a Performance-Based Parking Management Program. The process of change in Portland is just glacial.
Urbanists/schoupians often claim that they care about the poor* and propose the use “prebates” to mitigate tax/fee inequity. However, it’s my experience that this is simply a cynical talking point because while urbanists/schoupians are making these claims they are lobbying “behind the scenes” to push through deeply regressive fees that disproportionately target poor people.
*e.g. they feel their pain a la Bill Clinton
Ya great idea. People are parking less in Portland because it’s NOT safe and looks like a POS! So, rather than fix the problem by radically changing policy in regards to the way the city is run, let’s charge even more at the meter and even further ensure that the city goes in the shiitter. We’ve already chased away the businesses, let’s chase away the driver’s too! That’ll work! Someone should take away all their rope. They’re obviously making every attempt to hang themselves with it.
I drive to Portland only a few times a year (from a little city down south a ways). The most recent time was a few Friday evenings ago, when I arrived at about 5:30 and looked for parking a few blocks away from Powell’s in NW.
It took me about 15 blocks of driving to find an open street parking space (this is a sign that parking is VERY underpriced), and then when I found a spot and went to pay, I found out that I was only going to have to pay about $3 to park for the next six hours, because pay-for-parking ends at either 6 or 7 PM (I forget which). This is in a zone where there were full restaurants and bars on every corner, and there is demand for parking until late in the evening.
Street parking charges should be increased, obviously, and extended into the evening, perhaps with a lower charge as demand decreases. It can’t be that complicated, given that all of the pricing is controlled by the little programmed parking kiosks.
I could get more behind climate change, but it seems to lead all to money and revenue. So i assume that when all cars are pretty much electric and the power plants are all solar and wind…. Then the city will reduce the parking fee, because is will no longer be an environmental issue….?? Right??