City Hall

UW Transportation Spending Rose As Department Lobbied for Tax Break

By Erica C. Barnett February 17, 2011

Note: This post has been updated with corrected numbers from the University of Washington. The original numbers from the UW reflected the 2010 budget; the new numbers reflect what the university actually spent.

As we've reported previously, the University of Washington's transportation department, which runs the popular UPass bus-pass subsidy program for teachers, students, and faculty, has been lobbying the city council and state legislature to exempt the UW from some portion of the city's commercial parking tax, currently 12.5 percent, because the school subsidizes UPass through parking fees. (At the city level, the department asked for an exemption from a recent 2.5 percent increase; at the state level, they're asking for an exemption equivalent to the amount they spend on trip-reduction programs such as UPass.

The UW argues that because the school subsidizes UPass through parking, a parking tax will harm the program as people park less, lowering revenues. That, in turn, will price out students and others who can't afford more expensive bus passes. In recent years, UPass costs have increased dramatically, while student participation has started going down:

At a hearing in Olympia last week, UW transportation department director Josh Kavanagh argued that the tax break was necessary  to keep UPass going, noting that the cost of a student UPass has increased 125 percent over the last three years. "Coming to the legislature is truly a last resort for the university," Kavanagh told the senate transportation committee.

Yet even as Kavanagh's department has lobbied for an exemption to the tax---an exemption that would cost the city $1.8 million a year---the amount it spends on salaries and benefits has increased dramatically, from just over $2 million in 2007 to more than $3.1 million in 2010.

Part of that increase, Kavanagh explains, is because the university transferred several functions, including parking enforcement and the campus parking court, from the university police to the transportation department in 2008. Previously, those functions were funded by transportation but weren't reflected in its operating budget because they were transfers to another department. Additionally, though, the department also added added one position and filled a position that was vacant---a UPass manager and a manager to oversee the university's transition to the ORCA universal transit pass. Those new hires came at a time when the university was cutting programs and raising tuition across the board. (Kavanagh says the transportation department has also taken cuts and consolidated positions.)

Another question is why the university is focusing so heavily on Seattle's commercial parking tax---a tax it has traditionally paid---when, according to the department's budget, the vast majority of its cost increase has come from higher Metro fares, which have increased four times in the past four years. While the parking tax has added just over $1 million to the department's annual budget, Metro fares now cost the department nearly $20 million---up more than 56 percent since 2007. Given that Metro fares are the real cost driver for the department, why is it focusing on the relatively piddling million dollars it pays annually in commercial parking taxes?

Kavanagh says the department isn't focusing solely on parking; the reason it appears that way this legislative session is that all the university's other partners have come to the table and made concessions to help keep UPass alive.

"[Seattle's commercial parking tax] is the one thing that's remaining out there," Kavanagh says. "The transit agencies have come to the table to help make this program work, the students have, the university administration has---the city of Seattle owns owns this one piece of the UPass financial structure and they are the one major stakeholder that has not come to the table."

The university was talking with the city about a potential grant program to help pay for UPass and similar programs at other large institutions; the program would be funded through a further increase in the parking tax. However, Kavanagh says the proposed grant would not be enough money to fully fund the current subsidy.

Couldn't the university just pay for UPass through some other, more stable, revenue stream than parking? Kavanagh says the school is talking about it, but that a long-term, stable funding source is still a ways off. In the meantime, he says, the university needs all the help it can get to keep the program from going under.

"We're working to do that over time there, but there are only so many potential subsidizing streams [of money] that we have available, and the subsidy is what helps keep the program going," Kavanagh says.
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