Sunday, June 20, 2010

Tax the parking contractor

A friend came up with a solution to Chicago's parking contract problem. Besides numerous complaints about egregious rate hikes and meter boxes in what had been free zones, the real problem is the contracts' chief benefit is almost gone. The 75-year contract provided the city with billions in upfront cash in exchange for relinquishing meter revenue, with regularly scheduled rate hikes, for the next 75 years. While there was an understanding that some of the upfront cash would be spent right away to balance the city's budget, there was also an expectation that the city would bank the remainder for a "rainy day fund." Instead, Hizzoner Da Mare Richard M. Daley is thinking exactly the opposite: that future boom times will be needed to refill the coffers of the parking contract account. (By the way, how many tax cuts did the city allow in the boom 1990's? That's what I thought. And the mayor appears unopposed for re-election in a mere eight months.)

So my friend suggests passing a state law that levies an annual fee of $100 million on parking contractors for cities of more than one million people. There is only one such city in Illinois. I told him that if such legislation passed, LAZ Parking, the contractor, would sue. My friend, an attorney, believes the legislation would withstand a legal challenge. Whether it would withstand vigorous, vehement opposition from the mayor is another matter. If it passed, LAZ would likely be forced to abandon its control of Chicago's parking meters, ceding meter revenue back to the city. While this would be a revenue bonanza for the city, it would seriously undercut the mayor's ability to make deals with other contractors. The contractors would hesitate, fearing an unpopular deal would be made prohibitively expensive by the clowns in Springfield.

Some conspiracy theorists, including The Parking Ticket Geek, believe that forcing out LAZ was the city's plan all along--to make a sucker deal look like a dream deal. I find that hard to believe. But the Illinois Statehouse could end LAZ's meter box reign--and return meter cash receipts to the cash-starved city.

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