While Muni and the media refer to the proposed $109 increase in fast passes as a “fare hike,” it is actually a tax on tenants. Tenants, many of them low-income, make up at least 75% of Muni riders, and over 95% of them are unable to purchase homes in San Francisco. We know why Bush and Schwarzenegger support regressive taxation, but San Francisco is supposed to be charting a more progressive course. Here’s how the tenant tax can be stopped.
Conservatives have struck pay dirt by characterizing progressive revenue raising measures as “taxes” while regressive payments are described as “fees” or, in the case of public transit, “fare hikes.”
The classic example is the vehicular license fee paid by car owners. The fee has been in effect in California since the 1930’s, and was among the state’s most progressive taxes in that it is based on the value of the car. Since wealthy people tend to own more expensive cars, they paid a higher vehicular license fee.
But Republicans in Virginia got the idea in the 1990’s to recast their own vehicle license fee as a “car tax.” This idea swept to California, where Gray Davis cost the state billions by drastically reducing what Republicans—and nearly all of the state’s media-now exclusively referred to as the “car tax.”
Davis’ agreement to reinstate the higher vehicular fee schedule was a major factor in his recall, and incoming Governor Schwarzenegger cost the state $4 billion in his first week on the job by rolling back the higher fee. The biggest winners from the rollback were luxury car owners; the losers, to the tune of at least $1.6 billion annually, are the children who attend the state’s public schools.
I hope San Francisco’s Municipal Transit Authority and our Board of Supervisors remember who benefited and who lost from the repeal of the vehicular license fee increase. I hope they also recall that thousands of San Franciscans earning $200,000 or more enthusiastically backed John Kerry even though his victory would have raised their taxes, and that these taxpayers have already saved tens of thousands of dollars from Bush tax cuts that they strongly opposed.
The question of who will bear the cost of maintaining Muni service cannot be addressed in isolation. Rather, San Francisco officials need to account for who is profiting and losing from Republican economic policies at the federal and state level, and begin in a very small way to start leveling the playing field.
This means that the proposed $108 annual tax increase on tenants to cover the city’s public transit operations should be off the table until other revenue-raising measures are imposed.
The first and most politically acceptable move is to both expand access to residential parking permits and raise the permit fee. As I noted in my story of January 6, Muni can raise $3.2 million simply by raising permit fees to existing holders by $3.00 per month. If permit fees were raised the same amount as the proposed $9 monthly tenant tax, $9.6 million would be raised.
In addition, there are vast stretches of San Francisco residential neighborhoods whose residents want to pay for parking permits but cannot until the city creates the districts. Areas where residential parking permits are currently unavailable include the Richmond and Sunset west of 9th Avenue, a three block area around Alamo Square, and big chunks of the Mission, SOMA and Potrero Hill.
Of course, the Tenderloin remains the only residential neighborhood where permit parking is completely unavailable. The reason? According to a former Parking Department official whose honesty was much appreciated, the city makes so much money from meter violations in the Tenderloin that it cannot afford to allow residents to park via permit.
So whereas a resident of Pacific Heights can currently park on their street for $27 per month, Tenderloin residents are lucky if they can get a space in a nearby garage for $150 per month. Raising annual permit parking fees the same $108 per month as the proposed tenant tax would still keep Pacific Heights owners at $135, or $15 less than Tenderloin residents pay.
If the above neighborhoods are added to the city’s residential parking program, 25,000 new permits could potentially be issued. At $100 a permit ($73 above the current low rate), that’s another $2 million annually bringing the total new revenue raised from residential parking permits to around $11 million.
Muni management has proposed to raise $13.5 million from raising parking fees and fines. This would bring the total new revenue to $24 million, which is enough to cover the Muni deficit without a tenant tax disguised as a fare hike.
But raising parking fees disproportionately impacts those who cannot afford either private or public garages, and particularly impacts Tenderloin residents who are barred from the city from free daytime parking on their own street. Raising fines for parking in front of a fire hydrant or such may be warranted, but not for a meter running out.
Rather than steeply raise parking fines, the more progressive approach—and one that addresses the huge savings San Francisco car owners received from Governor Schwarzenegger, is to raise the cost of parking in city garages. Increasing such fees not only allows non-San Francisco residents to help cover our public transit costs, but it could reduce traffic in the city as well as increase Muni’s ridership.
Historically, members of the Board of Supervisors have been reluctant to raise any costs to homeowners, and have instead followed the Republican approach of funding the costs of public services through user fees. The only way this can be avoided in the case of Muni is for our Supervisors to include the savings to car owners from the vehicular fee rollback in their calculations.
80 per cent of San Franciscan voters opposed Davis’ recall. If it had lost, the car registration fee would not have been reduced. The city’s car owners have received a windfall they neither sought nor desired—-and fairness dictates that some of their savings goes to funding Muni.
How Muni is funded is not a dispute over raising taxes. Rather, it is a choice over whose taxes will be raised.
Tomorrow: Why California’s future is at stake this November and how activists can shape the outcome