This Washington

UW Parking Tax Exemption Likely to Pass Committee this Week; Hospitals May Want In on Action

By Erica C. Barnett February 22, 2011

A bill that would exempt the University of Washington from the city's commercial parking tax is likely to pass out of the senate transportation committee this week. The UW argues that it shouldn't have to pay the tax because it uses parking revenues to pay for its popular UPass bus-subsidy program; with higher taxes, the university says, people won’t use the UW’s parking lots—slashing funding for the UPass program, whose cost has risen dramatically over the last several years. The city opposes the bill because it would cost Seattle $1.8 million this year and $3 million in subsequent years; last week, city council members and lobbyists went down to Olympia to testify against the legislation.

The UW unsuccessfully lobbied the city to exempt it from a 2.5 percent increase in the parking tax last year; this bill would exempt it from the tax up to the amount the school spends on UPass.

Now, several other nonprofit agencies are reportedly trying to get on the tax-break action. Their likely (and quite reasonable) argument, which came up during last year's discussions with the city council: If the UW gets a special tax break for subsidizing transit, they should too.

The potential hit to the city if the state exempts all other qualifying nonprofits from the parking tax would be enormous. Although city staffers couldn't calculate an exact revenue hit because many nonprofits' parking garages are operated by private third-party companies that don't release their revenues publicly, the exempted institutions would almost certainly include the Woodland Park Zoo, all local universities and community colleges, Swedish Hospital, and Providence Hospital---in other words, many of the largest parking garages in the city.

Because it's a fiscal bill, the tax-exemption legislation has until February 25 to make it out of the senate transportation committee (as opposed to other policy bills that had to make it by yesterday). City lobbyist Craig Engelking says that although the city would prefer to work with the UW on a longer-term solution to the university's budget woes, the battle in Olympia makes that kind of collaboration more difficult.

Ultimately, the $3 million the university would save each year is a drop in the much larger UW transportation budget. As we reported earlier this week, the parking tax makes up a minuscule amount of their increased cost; the vast majority comes from higher Metro fares. And spending on salaries and benefits at the UW's transportation department, which runs the UPass program, increased even as the department lobbied for the tax break.
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