spend and tax

The federal “free parking” subsidy makes the front page of NYT.com with an article by William Neuman. The new spin on this: many of his interviewees are HR folks, who despite not being transportation geeks also seem to understand the silliness of this tax break.

“It doesn’t make any sense,” [Gerard Bridi, president of WiredCommute, a corporate benefits provider in Wellesley Hills, Mass.] said. “On the one hand you want to reduce congestion by encouraging people to take public transportation. On the other hand you give people who drive” a tax break… while the [tax-free] transit program is used by more than two million people nationally, according to estimates by benefit providers, the benefit is capped at $110 a month, giving transit riders a lower tax savings.

And no savings for those who walk or bike, of course — and, since it works like an income tax deduction, it (like all deductions) favors those in higher brackets who least need tax breaks. Wonderful!

“In general the efforts in this regard are at cross purposes,” said Jon Kessler, the chairman of WageWorks, a corporate benefits company in California. He said that while the tax break for parking helps promote jobs in cities by making it cheaper to get to work, it does nothing to reduce traffic. “People,” he said, “are trying to accomplish different things…” He estimated that because parking costs vary across the country and not everyone uses the full amount, the tax savings nationwide from the parking benefit add up to about $150 million each year.

On another topic, the last city of Chicago budget I read thoroughly was the 2004 proposed budget. Just out of curiosity, I compared that document’s 2003 figures to the new 2008 projections:

2003 actual: $4.719B total, $2.550B corporate fund
2003 inflated to 2007 using CPI: $5.342B total, $2.887B corporate
2007: $5.669B total (budgeted), $3.080B corporate (projected as of 30 July)
(2008 corporate fund expenditures are forecast at 6% above 2007)

The total budget is growing at a rate 52.5% above inflation and the corporate budget at a rate 57.3% above inflation. It might be interesting to compare these numbers to other large, slow-growth cities.

It’s too bad that the property tax figures are reported so poorly on both tax bills and in the budget books, although perhaps the county treasurer would have overall figures. I know that pension and health costs, which are the biggest users of the property tax, have increased substantially, but it’s hard to justify such a sustained increase over the general inflation rate when services have not appreciably improved.