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Committee forwards 10‑point parking tax increase amid dispute over unrecovered revenue
Summary
An ordinance to raise the parking occupancy tax and impose a 35% additional valet tax was sent to the full board without recommendation after treasurer's office data and industry estimates clashed over an alleged $20 million in unrecovered revenue; treasurer’s staff said audits recovered about $1 million in the past year and pledged to review submitted data.
The Budget and Finance Committee considered an ordinance to raise the city’s parking occupancy tax from 15% to 25% (bringing the total including surcharges to 35%), to clarify operator definitions and to impose an additional 35% tax on valet parking gross receipts. Supervisor McIlwaney led discussion of the measure and invited the treasurer’s office to brief the committee on audit and collections practices.
David Augustine of the treasurer’s office told the committee that parking tax revenues were about $64.5 million in fiscal 2008–09 and the estimate for fiscal 2009–10 was roughly $65.4 million. Augustine said the office conducted 107 audits in 2008–09 and 180 audits in 2009–10, has 3.5 auditors assigned to parking audits, and that audits had generated about $1 million in taxes, penalties and interest in the reported period. “We anticipate ... to hit every parking lot once every about three years,” Augustine said, citing a three‑year statute of limitations for collection.
Industry speakers and unions disputed the treasurer’s recovery figures and cited extrapolations suggesting larger underreporting. Ron Bridal of the San Francisco Parking Association recounted a quick industry estimate that arrived at about $20 million in underreported parking tax revenue citywide based on facility counts, average ticket values and an assumed underreporting rate. Mark Gleason of Teamsters Local 665 and other commenters urged stronger enforcement before raising the tax on already‑compliant operators.
Small‑business operators warned of downstream impacts. William Ortiz, founder of Gentle Parking and a certified local business enterprise, said a 10% increase on gross valet receipts could force him to raise prices or eliminate jobs: “Taking away 10% of my gross revenue would eliminate me. I’ve created 25 jobs in San Francisco,” Ortiz said.
Treasurer’s staff agreed to review any data the industry submits and said legislation tightening enforcement and penalties is forthcoming. The committee voted to forward the ordinance to the full Board of Supervisors without recommendation for further review and possible amendment.
