Not Thrilled With The Parking Rate Increase

  • Friday, August 28, 2015

Mark your calendars for Sept. 1—the day the Chattanooga Parking Authority has announced it will raise parking rates around the city. In addition to the rate hikes, the Parking Authority will extend enforceable hours from 4:30-6 p.m.  and will include Saturdays as well.

The Parking Authority has allowed for a learning curve, however, saying that during the month of September, employees have been instructed to issue warnings for violations occurring as an effect of the new policy.

Understandably, not everyone is thrilled with the increased rates, which were approved unanimously by the Chattanooga Area Regional Transportation Authority Board in mid-July. From a policy standpoint, though, the rate hikes may be necessary.

The Parking Authority, which is owned by CARTA, has cited various other cities within the Southeast and their parking rates as reason to hike Chattanooga’s. This, at its core, is a “they’re doing it, then so should we” argument, and has little bearing on what is good for the city.

Many of the cities CARTA mentions with higher parking meter rates also have higher populations and a greater demand for parking and public transit. For example, Nashville, Atlanta, and Memphis all have populations of two to three times the size of Chattanooga, and Atlanta runs its train system through the public transit authority.

If one then looks at Athens and Charleston, who have smaller populations, as well as Knoxville, which has a higher population by roughly 10,000, one would find that each city has a rate equal (with Knoxville having multiple rates, both equal and higher) to Chattanooga’s current rate. There are, of course, exceptions to this rule.

While the argument that CARTA publicly imposes is a weak one, that does not mean there is not a good reason for the rate hike.

According to a fiscal year 2014 funding request to the city from CARTA, the transit authority has accumulated a debt of over a million dollars, all payable to the city.  In order to satisfy debts and operate under a balanced budget, any organization, whether public or private, must increase revenue and/or reduce costs. During CARTA’s fiscal year 2013, it’s combined parking and operating revenues were approximately $7.8 million dollars. Of all sources of funding, parking revenue was CARTA’s smallest.

In addition to an increase in funding, rate hikes will increase the availability of Chattanooga’s parking spaces. Currently, there are 2,100 metered spaces, and an additional 2,200 spaces in garages or surfaced lots that are owned by the city. That’s one space for every 57 people in Chattanooga. When factoring in the additional 15,750 private spaces in Chattanooga, the number becomes 9 people to every single space.

There are, of course, other problems with the parking authority that need to be considered in the long term, and could help provide solutions to avoid unnecessary future increases. Consider the free electric shuttle downtown. 89,000 people rode that shuttle last June alone. If there were some fee associated with the shuttle, CARTA could take in additional operations revenue.

CARTA also relies heavily on government funding to operate. In it’s FY14 funding request, CARTA states that its budget included $4.9 million from the city, $2.9 million from the state, and $3.7 million from the federal government. This means that people from other states and people from other cities within Tennessee are providing funding to Chattanooga’s transportation authority. Mayor Burke’s fiscal year 2015 budget (which just came to a close) included more than $5 million dollars in funding to CARTA from the city alone.

There exists an idea within the policy world known as the benefit principle. That is, those paying for a service should be the same people benefiting from said service. With CARTA, this is not the case, to the tune of at least $6.6 million a year, if not more.

So, while parking rate hikes will offer a short-term solution to keep CARTA running for the near future, work needs to be done to ensure CARTA is running efficiently for Chattanoogan residents. If CARTA, and the city council that gives CARTA its authority, would like to see a long term solution in place, they should first absolve themselves of their debt, and then require a balanced and public budget to be submitted annually by CARTA’s board.

Beyond that, the city should consider reducing the size and scope of CARTA in order to cut dependence on state and federal aid, and then adjust the user rates accordingly. This would maintain fair pricing, and, more importantly, that only those who use Chattanooga’s public parking services have to pay the price.

Ethan A. Greene
Policy Analyst
River City Policy Center
RiverCityPolicy.org

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