Jersey City Officials Move to Adopt Parking Tax Targeting Out-of-Towners

Large municipalities can now impose a 3.5% tax at commercial parking lots

It’s the bane of any bustling municipality: too many cars and too few commuters using mass transit.

Now, armed with a new state law, Jersey City is looking to change the terms of the financial equation for commuters who opt to drive into town. The measure, signed by Gov. Phil Murphy earlier this month, allows municipalities in New Jersey with at least 100,000 residents to impose a 3.5% tax on fees collected at commercial parking lots.

The measure, approved by both houses of the Legislature during the lame-duck session in December, earmarks the money raised for projects designed to enhance pedestrian access to mass transit like bridges, platforms, walkways and escalators. Money left over in a budget cycle after those needs have been met can be diverted to “quality of life” projects.

In addition to Jersey City, five other municipalities — Newark, Paterson, Woodbridge, Elizabeth and Edison — qualify under the law, which permits them to impose the tax if they choose to do so.

Jersey City Councilman James Solomon said the city is looking to unclog its streets by making mass transit a more attractive option.

“If you don’t give people options, they have to take a car,” he said. “So if we create transit infrastructure, if we create bike lanes, if we create safe pedestrian walking areas, you give people a realistic option to leave their car at home.”

Solomon represents the city’s downtown area, where Mayor Steven Fulop and other officials say they’d like to see a new light rail station built near the entrance to the Holland Tunnel, in a neighborhood that is growing rapidly and is home to Holland Gardens, a public housing project.

“The goal is to get transportation for a side of, a part of Jersey City who has been isolated,” said Joyce Watterman, city council president. “If you go down to Holland Gardens, you could see it’s very challenging for transportation there. So that’s our goal to really get transportation down in that area.”

New light rail station

Officials estimate the tax could generate as much as $1.3 million a year, which the city could borrow against to fund the $20 million cost of a light rail station.

But as with most things emanating from Trenton and City Hall, the devil is in the details.

The law makes the parking lot owners responsible for collecting the fee and holds them personally liable for turning the money collected over to City Hall, but the mechanism to ensure that is not yet in place. And while the law says drivers who can prove residence are eligible for a discount, they will still have to pay the additional tax up front and then apply to the city for a refund.

Council members, who introduced the ordinance authorizing the tax in Jersey City last week, say the technology exists to both audit the parking lot operators and to identify qualified residents. Several are suggesting a special residents-only decal for the window of their cars.

City resident Felicia Palmer is skeptical.

“I’m very cautious about being optimistic because the city really does a poor job of execution,” she said.

At the state level, the law was opposed by Republican lawmakers, who called it yet another tax burden on the middle class in an already expensive state.

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