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Mailbag: Businesses are part of parking solution, not problem

March 07, 2013

My friend Norm Grossman was quoted in a recent column by David Hansen, "City eyes more downtown private parking," suggesting that the city of Laguna Beach tax private parking because banks are "basically running the parking lot for free, as far as the city is concerned. The city is getting nothing out of that."

Monica Tuchscher, a highly respected city planner, echoed Norm's comments, saying "There's these secondary businesses that may not be 'legal', and one method is to try. . .to gain revenue from that to offset other expenses."

While I understand that city officials would like to have more revenue for deserving city projects, I wonder whether Norm, Monica and I are seeing the same problem. The single issue that virtually every Lagunan puts at or near the top of the list of Laguna's problems is a lack of parking, particularly during summer. That issue has topped those lists for many years, and certainly tops the list for Laguna businesses.

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Businesses that "run a second business" (a parking lot) are providing a service that the city has been unable to provide. They are, it seems to me, part of the solution, not part of the problem. Taxing them to "offset other expenses" is a short-sighted solution to a long standing problem.

Norm seems to feel that instituting a tax on Wells Fargo Bank and other providers of parking is "fair" because they are making money as a parking lot. They are, of course, already paying Laguna business license tax on their gross receipts, including their parking receipts. They are, of course, paying property tax on the land the parking lot sits on. Both of those taxes provide revenue to the city — and may provide significantly more revenue if the state legislature has its way eliminating Proposition 13 tax savings on business property.

From the standpoint of economics, an added tax is simply an increase in the price of doing business. Economics tells us that when the profit in an activity goes down, entities are less likely to engage in that activity. It would be a shame to discourage the use of private parking spaces — estimated in David Hansen's article as 25% of the total available supply of parking spaces in the downtown — because Laguna has added a parking tax to "offset other expenses."

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