Chicago Proposes “Congestion Fee” On Parking to Fund Transit

Chicago Mayor Rahm Emanuel wants to use a parking surtax downtown to pay for transit.

In last winter’s Chicago mayoral election, all the leading candidates made ambitious promises to increase funding for the city’s struggling transit agency. Now, with a proposed $2 “congestion fee” — really a downtown surcharge on the city’s parking tax — Emanuel plans to make drivers pay their fair share and use the proceeds to build a new rail station and the city’s first bus rapid transit line.

Under Emanuel’s plan, anyone parking in a downtown lot or garage would be required to pay an additional $2 on top of the existing parking tax. Drivers parking on the street or in residential garages wouldn’t be taxed, though according to the Chicago Tribune, some transportation advocates want to see the fee extended to downtown meters. According to the Sun-Times, the fee would raise roughly $28 million.

Emanuel and his transportation commissioner, Gabe Klein, want to use that revenue to complete two important transit projects. A new Green Line station at McCormick Place would allow for transit-oriented development in a fast-growing part of the city. A bus rapid transit system with dedicated, camera-enforced lanes, priority at traffic signals and off-board fare payment will be put into place for a new downtown circulator route.

An earlier version of the same plan was put forward by Mayor Richard M. Daley in 2008, with parking fees that would have gone up to $8 a day to fund an even wider BRT system, but opposition kept that plan from being enacted before a federal deadline passed.

For New Yorkers, the substance of Emanuel’s plan isn’t groundbreaking. The Chicago BRT line looks like it will have roughly the same features as New York City’s Select Bus Service, and New York already charges an 8 percent surtax on parking in Manhattan; with daily parking rates in Midtown averaging $41, that works out to about $3.25.

The politics of the proposal, however, look awfully foreign. The parking fee isn’t paying for the rail station or bus line on its own (the Green Line station alone will cost $50 million). Putting the two together is, as the Sun-Times reported, a political strategy to build support for Emanuel’s budget. In other words, “Rahmbo,” the hard-nosed operative who once plunged a steak knife into a table while shouting the names of his political enemies, thinks that pairing higher costs for drivers with improved transit is a political winner.

That’s not something you’re likely to see in New York City, despite a significantly lower rate of car ownership. Though a number of pols are ahead of the city when it comes to supporting full-featured BRT, many segments of the political class are more likely to complain that a bus lane eliminates highly subsidized on-street parking.

  • Noah

    This is just atoning for Chicago’s sin of privatizing their on-street parking meters for 75 years and cheating its public coffers out of hundreds of millions, if not billions, of dollars.

    Thanks to Streetsblog for its previous coverage of this:

    12-12-08
    http://www.streetsblog.org/2008/12/12/chicago-outsources-parking-reform-to-morgan-stanley/

    06-17-09
    http://www.streetsblog.org/2009/06/17/chicago-pays-the-price-for-parking-privatization/

    11-20-09
    http://www.streetsblog.org/2009/11/20/its-official-chicago-parking-privatization-a-massive-rip-off/

  • It seems to have been lost, but in his original speech he said the fee increase would be used to “invest in new and existing stations, and bus rapid transit stations, expand bike lanes, and other efforts to reduce congestion in the downtown area”. It’s been a week and the administration has never uttered “bike lane” and “congestion premium” in the same breath since. 
    http://gridchicago.com/2011/was-emanuel-saying-he-would-use-congestion-parking-tax-for-bike-lanes-a-fluke/

  • Peter Skosey

    i do believe bike sharing will be something funded from these proceeds as well Steven. Chicago’s RFP for 3000 bikes in phase one with another 2000 in phase two is on the streets now!

  • I wish I could reply directly to the commenter, but this is what I know about bike sharing so far:
    1. Chicago received an $18 million CMAQ grant to fund the purchase and installation of a bike sharing system. 
    2. The operator and Chicago will share in profits. 
    3. The operator and Chicago will share in deficits. 
    4. Like the Capital BikeShare system in Washington, D.C., Chicago expects to make a profit, so no additional funds would be needed. 

    As an aside, Chicago is open to the operator building more stations and bikes than 300 and 3,000 respectively, but at their own cost. AND, they are open to sponsors buying additional stations (like a university or hospital campus). 

  • Anonymous

    Rahm is the ultimate tax-and-spin politician. It’s all about raising tax revenues from the 99% while still letting the political goodies and corporate tax incentives flow so he can fund-raise for much elective office. But the taxpayers’ ire is rising, and I think it should start with a few chuckles mixed in. Check out this series of YouTube videos about our verbally balletic Mayor as he negotiates news conferences, PR strategizing and voter encounters: http://tinyurl.com/3vpauh3

  • I wrote about some unintended possible consequences of the $2 congestion tax.

    http://blog.spothero.com/2011/10/the-2-chicago-parking-tax-will-cause-huge-problems/

  • Guest

    Keep taxing the daylights out of everyone, Rahm. Pretty soon it will be like Detroit, and there won’t be any ‘congestion’ to worry about.

    “People in groups make decisions, which as individuals, they know are stupid.” – The Abilene Paradox

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