New Parking Tax for Six NJ Municipalities Awaits Governor’s Signature

John Reitmeyer | December 18, 2019 | Budget
Edison, Elizabeth, Jersey City, Newark, Paterson, and Woodbridge could impose a 3.5% tax; Republicans say it’s more of the same from tax-inclined Democrats
Credit: Martin Haobam/Unsplash
The proposed tax could be levied on parking fees charged at public and private facilities other than those that serve “premises occupied solely as a private one- or two-family dwelling.”

New Jersey’s largest municipalities could soon have the authority to levy a new tax on parking to help raise money for pedestrian-access improvements at mass-transit stations.

A bill that would let local officials in six municipalities establish a 3.5% local parking tax is awaiting final approval from Gov. Phil Murphy after winning a slim majority in the Democratic-controlled Legislature earlier this week; it would go into effect immediately.

Sponsors have said the revenue that would be generated by the proposed tax — which could be levied in Edison, Elizabeth, Jersey City, Newark, Paterson, and Woodbridge — is sorely needed to fund pedestrian safety improvements in those communities. Fine print that was added to the legislation in mid-December would also allow the new revenue to be used for “quality of life projects” under certain conditions.

But the proposed parking tax has also drawn heavy criticism from Republicans, who have portrayed it as just the latest in a long line of tax increases championed by Murphy and fellow Democrats.

According to the latest version of the bill, the proposed 3.5% tax could be levied on parking fees charged at all public and private facilities other than those that serve “premises occupied solely as a private one- or two-family dwelling.”

Only six municipalities would initially be permitted to charge the parking-fee tax, since the bill restricts it to only those that had a population of at least 100,000 as of the most recent five-year estimate from the U.S. Census Bureau’s American Community Survey. The municipalities that currently meet that requirement are Edison, Elizabeth, Jersey City, Newark, Paterson, and Woodbridge.

Bridges, tunnels, platforms, walkways

The measure wouldn’t force any of the six towns to levy the tax, but instead would give them the option of doing so. It would also legally earmark any revenue raised through the tax to funding projects that “improve pedestrian access to mass-transit stations.” These could include “the construction of bridges, tunnels, platforms, walkways, elevators, escalators, and stairways directly related to mass-transit pedestrian accessibility,” according to the bill.

The “quality of life projects,” which the bill would also allow to be funded, are not specifically defined. And they could only be funded if there were “any parking tax revenues remaining after all the budgeted mass transit pedestrian access capital improvement expenditures have been used in a fiscal year.”

If enacted, the new parking tax could be imposed in addition to state sales taxes that already are levied on fees charged for “parking, storing, or garaging a motor vehicle,” with some exclusions. Among those exclusions are residential parking, employee parking at employer-owned facilities, and all municipal parking, including metered parking.

The six municipalities where the new tax could be imposed could also provide residents with discounts.

The bill initially passed the Assembly earlier this year in a 41-33 vote. (A minimum of 41 votes are needed to move bills out of the Assembly, and 21 are needed to move them out of the Senate.)

Democratic sponsors at the time argued the new parking tax would support efforts in cities like Newark to improve pedestrian accessibility and safety at mass-transit stations that serve both public and private facilities. But several amendments were made following the initial vote, so the bill had to go back through the Assembly on Monday, passing this time by a 42-33 margin. It also cleared the Senate on Monday in a 21-16 vote.

The final passage of the bill in both houses of the Legislature has come with only a few weeks left in the current, lame duck legislative session. If the governor fails to sign it, to become law the legislation would have to be redrafted and reintroduced in the new legislative session that begins in mid-January.

The bill’s reappearance on the legislative agenda this week helped to fuel renewed Republican criticism of the majority Democrats, including allegations that Democrats are not prioritizing tax relief at a time when the GOP is arguing that recent public-opinion polling and election results have demonstrated that voters are as concerned as ever with high taxes.

“People pay too much,” said Assembly Minority Leader Jon Bramnick (R-Union) said. “That is what we need to address.”