(The Center Square) – Spokane is implementing a new 12% commercial parking tax next month under a plan set for a vote from the city council on Monday night to solidify who will and will not pay the fee.
Monday’s vote will essentially create a rulebook for how the city applies and collects the tax, which the Spokane City Council passed last fall to help fill a $13 million deficit heading into January. The officials pushed implementation to April after passing it on short notice, causing backlash from the community.
The tax proposal, which the dais passed in November, came as the city’s sales tax revenues plateaued, office vacancies soared, and residents reported feeling unsafe downtown. Business leaders said it was presented without any advanced outreach and warned that another tax would deter economic activity.
“Our tenants cannot withstand this self-inflicted economic burden,” the Spokane Building Owners and Managers Association wrote in a letter of opposition to the council and Mayor Lisa Brown in November.
According to a 2019 parking study, downtown Spokane has 37,000 parking spaces, 85% of which are off-street and 15% on-street. Overall, parking accounts for about 30% of the land in the study area.
Parking occupancy during the 2019 study peaked during the busiest times of the week at about 56%.
The proposed public rule says that the tax equals the parking fee multiplied by the new tax rate: 12% at the standard rate and 6% for lots that qualify for the city’s efficient land-use credit. It will generally cost 12 cents for every $1 of parking at the standard rate, or 6 cents for every $1 at the reduced rate.
To qualify for the 6% rate, commercial parking businesses must have two or more floors of parking, an underground level, or a “counter-complete building permit for residential or commercial development.”
Since parking rates can vary by business, including by each lot that a business might own, it’s difficult to say how much the tax will cost people in Spokane. For some, it may amount to a few extra dollars per month, but critics have suggested the tax could add hundreds of dollars per month for frequent parkers.
“We’ve heard from our hospitals, these really critical sectors that we rely on in Spokane, they, too, are trying to balance their budget without overburdening their patrons,” Mary Miller, public policy director for Greater Spokane Incorporated, testified during a council meeting last fall. “This policy undermines progress for those sectors at a time when they really desperately need protections for the long term.”
Tax-exempt carpools, government vehicles and anyone with a disabled parking placard would not have to pay the new parking tax. The proposed rule also exempts long-term parking of 30 days or more for residents, students, and employees at businesses that rent stalls to those customers for exclusive use.
A proposed amendment from Councilmember Paul Dillon would define “designated stall” to clarify that those exemptions only apply to stalls clearly identified by signs or pavement marking. The rule would also exempt Spokane Transit Authority park-and-ride users and the city’s on-street parking system.
The proposed rule says the parking tax is in addition to any other retail sales taxes, fines or fees that the parking business might also charge. Parking receipts must break down the cost of the parking tax, or lump it in with other retail sales taxes, so the customer can see how much they are paying for it.
City officials said in November that they expect the parking tax to generate about $2 million annually.
