Motorists Could Face New Tax on Parking In Six NJ Cities

John Reitmeyer | February 15, 2019 | Budget
Assembly committee approves bill allowing local leaders to impose 3.5 percent levy on parking fees, raising revenue to boost safety around mass-transit stations

Credit: Wikimedia Commons
Paterson train station
State lawmakers are considering letting New Jersey’s largest municipalities levy a new local tax on parking fees, but with the catch that the revenue can only be used to improve pedestrian access at mass-transit stations within their communities.

A newly introduced bill seeking to establish a special tax rate of 3.5 percent on parking fees in a limited number of places was approved yesterday along party lines by the Assembly transportation committee.

Supporters of the legislation cited a need to improve safety conditions for mass-transit riders and also noted that it would limit the locations where the tax could be imposed to Edison, Elizabeth, Jersey City, Newark, Paterson and Woodbridge.

But opponents criticized it as another in a series of new taxes or fees imposed or under consideration in the Democratic-controlled Legislature in recent weeks.

The bill’s introduction also comes on the heels of recent polling that showed taxes remain a key issue for New Jersey residents, and that more people view the policies enacted by Gov. Phil Murphy, a first-term Democrat, as more hurtful than helpful to the middle class.

How it would work

Under current law, New Jersey’s state sales tax can be imposed on fees charged for “parking, storing or garaging a motor vehicle” with some exclusions, according to the Division of Taxation. The exclusions are generally for residential parking, employee parking at employer-owned facilities, and all municipal parking, including metered parking.

Some towns are also already allowed under state law to levy other local parking taxes, including Newark and Camden, according to the division.

The new tax under consideration would also be applied at the local level, with a 3.5 percent levy on fees charged at all public and private facilities other than those that serve “premises occupied solely as a private one- or two-family dwelling.”

The six municipalities designated under the measure, introduced and approved for the first time in committee yesterday, are those that had a population of at least 100,000 residents as of the most recent five-year estimate from the U.S. Census Bureau’s American Community Survey.

Improving pedestrian access

The bill limits how the resulting revenue can be used, to fund projects that “improve pedestrian access to mass transit stations.” The legislation would let the municipalities that already have local parking taxes, like Camden and Newark, provide their residents with discounts worth up to 8 percent on those existing levies. It also prohibits the cities from levying the proposed new local parking tax on top of any special-event parking tax.

The bill is sponsored by Assemblywoman Shanique Speight (D-Essex). She did not attend yesterday’s hearing and could not be reached for comment afterward. But committee chairman Dan Benson (D-Mercer) stressed that the measure is “permissive,” meaning it would not require the communities to levy the tax, just give them the option to do so.

“So it may not end up in every place that meets the requirements here,” Benson said. “I think the intention is a good one and the money has to be spent for a very particular use.”

Assemblyman Tom Giblin (D-Passaic) also pointed to recent pedestrian accidents and said if the bill ends up saving lives “it’s money well invested.”

GOP sees ‘death by a thousand cuts’ for taxpayers

But Republicans on the committee raised concerns about adding to the heavy burden of residents in a state that already has among the highest property taxes in the nation. They also pointed to a series of new taxes and fees that have come up for consideration in recent weeks, including a fee to improve stormwater-management systems and a proposed new property tax that would fund arts programs.

“We just can’t keep going back to the well every time,” said Assemblyman Anthony Bucco Jr. (R-Morris). “This is like death by a thousand cuts.”

“While it may not be a huge tax increase, it will certainly be another burden that we’re going to place on commuters, that we’re going to place on people who go to these places for tourism, and that really concerns me,” he said.

His fellow Morris County Republican, Assemblywoman BettyLou DeCroce raised similar concerns and held up Metropark Station in Woodbridge as an example of a facility where parking is already expensive for commuters or those taking a daytrip.

“That’s a great place to go and park and get on the train, but it means all these fees and costs are going up,” DeCroce said. “People struggle now.”