Does the city of Sacramento's parking revenue strategy open the door to yet another arena lawsuit?
Subsidy critics point to state and local statutes that restrict governments’ ability to raise taxes through new fees
Curtis Park resident Natalie Rios works in south Sacramento now, but she remembers what it was like to have to feed the meter every two hours when she worked in Midtown. After reading about a plan to hike Sacramento’s meter prices and reduce the amount of free parking available in the central city, the pang of sympathy she felt for her fellow meter slaves drove Rios to foment a rebellion in the public square of the day:
On July 21, Rios filed an online petition seeking to galvanize opposition to the city’s unfolding parking revenue strategy, which is expected to go before the Sacramento City Council for approval and input in late August or early September. As of Tuesday, the petition, at Care2.com, had garnered 248 signatures on the way to its August 25 goal of 20,000.
But that doesn’t reflect the scale of the public’s negative reaction, which has fired up online forums and social media websites, including SN&R’s Facebook wall.
Like others, Rios drew a direct connection between raising parking revenues and the city’s $223 million share of the new arena whose bones are currently rising up from a dirt lot downtown.
“They went on and pushed the deal and now we’re expected to pay for it in this way. It’s absurd,” Rios wrote in an email. “They’re running small businesses into the ground and renewing a metropolitan area from parking meters? I’m not for it at all.”
City parking manager Matt Eierman denied to The Sacramento Bee that the parking revenue strategy was tied to the city’s arena bond obligations.
The city has made no secret that it needs parking revenue to help cover its share of arena construction costs. But the degree to which that parking money plays a role is a matter of litigious scrutiny.
About a year ago, Eye on Sacramento dropped a potential legal challenge to the city’s agreement with the Kings ownership group when the city altered its bond payback structure from being directly secured by parking assets to an unsecured arrangement that relies on the general fund for collateral, explained the watchdog group’s president, Craig Powell. “That restructuring killed our ability to use those statutes … to challenge the arena bonds,” he said.
But now that the city is preparing to raise parking revenue, arena-subsidy critics are characterizing the plan as the kind of backdoor tax that a 5-year-old voter initiative outlawed—and signaling they may have the grounds to mount a legal challenge.
“There has to be a nexus for that tax, and that's something that I'll be looking at very closely,” said Katy Grimes, president of the Sacramento Taxpayers Association.
In 2010, California voters narrowly approved Proposition 26, which restricted the state and local governments from disguising new taxes in the form of levied fees. The ballot language specifically narrows the ability of local governments to impose charges that don't go toward providing specific benefits or municipal services. Some exceptions apply to the so-called “Stop Hidden Taxes Initiative.”
Powell doesn’t believe any exceptions apply in this case, and notes that the city's own code prevents it from using parking revenue on nonparking-related programs and costs.
The code in question, Chapter 10.40.130, says the fees collected through parking meters and “pay-by-space/pay-and-display machines” are levied to “provide for the proper regulation and control of traffic upon the public streets, to provide for public vehicular off-street parking facilities and to cover the cost of the supervision, inspection, installation, maintenance, control and use of the parking spaces and regulating parking of vehicles in the parking meter zones.”
Coupled with some older state statutes that Powell believes apply, Proposition 26 and Sacramento City Code may anchor a forthcoming legal challenge to the parking revenue strategy.
If so, it would be a subplot to the years-long arena drama. Last week, a superior court judge dismissed arena opponents’ claims that the city fed Kings owners secret subsidies.