Parking and Taxes

Norfolk’s Parking Paradox
In less than 24 months, Norfolk will get a tower rivaling Virginia Beach’s tower at the Town Center.

Norfolk will also get an additional 600 parking spaces, which is the game plan for the proposed $126 million hotel and conference center announced last Friday.

Let’s assume hotel guests won’t be charged for parking at the hotel. Let’s also assume that 600 guests won’t be staying at the hotel at one time.

So let’s figure that a portion of the parking spaces will be open to the public for a fee while the rest may be farmed out to office tenants.

Friday’s announcement said “revenue from the parking system will support it,” meaning the new parking garage, costing $19.5 million, and revenue meaning parking fees.

Parking garages in Norfolk are financed from general obligation bonds, which are supported primarily by real estate taxes, or by parking revenue bonds, of which the debt service is paid by parking fees.

Norfolk will add 600 parking spaces to its parking portfolio while financing the operation and maintenance of The Tide, the city’s 7-mile light rail system.

I still say that Norfolk’s parking fees are a “benign” tax on visitors from other local cities and on tourists.

Parking fees, moreover, tend to discourage investment in downtown Norfolk, as the fees add $3.00 to $4.00 on top of the base rent for many tenants in downtown Norfolk.

At a time when companies are looking to cut their costs, it makes no sense to pay additional fees on top of their rent. So why not settle in Chesapeake or Virginia Beach where parking fees are non-existent. And they do.

The vacancy rate for office space in downtown Norfolk is 16.6 percent, totaling close to 900,000 square feet of empty space.

If we want food carts, we need people.

If we want a public arts district, we need people.

If we want all these trendy things and more, bring the people here.

Hybrids and Taxes
Southern Auto is advertising that it will pay the state sales tax on the purchase of a new car if you buy a new car from them.

“No More Taxes,” the ad screams.

I wonder if Southern Auto or any of the other dealerships in the region will agree to pay the $100 fee on hybrid vehicles.

It’s catchy, considering the “bold” transportation package put together with “anguish” and “hours of number crunching.”

No more taxes. Where have I heard that before? Now I remember – the car tax.

Which we are still paying, despite that “bold” promise by former Governor Gilmore to eliminate it.

In thinking about the state’s scheme to eliminate the gas tax and raise the sales tax to make up for the revenue, I realize it has a serious flaw, an Achilles heel.

Take, for example, two retailers.

One prices an item at $100. His competitor drops the price to $90. The original seller drops the price again to $85 to get the business.

Discounts, marked down items – what does that do to the sales tax?

5.3 percent of $90 is less than 5.3 of $100. So, essentially, the state will collect less in taxes than it would with a gas tax.

Yet you can’t finagle the gas tax. It is what it is.

But instead of raising the gas tax incrementally, we who pay are left shaking our heads at the convoluted package passed by the General Assembly and approved by Gov. Bob.

As one reader said to me, people still pay for gas, even if the price goes up.