If Providence Mayor Brett P. Smiley has his way, parking in private lots in the city could get a little more expensive as the administration attempts to implement a “consumption-based tax” as a new revenue source.
With the city facing a large financial shortfall, Smiley says he will be seeking permission from the General Assembly to institute a 7% sales tax on the city’s private parking operators, but it remains to be seen what effect that might have on the public’s willingness to patronize events and businesses downtown, where the cost and scarcity of parking are already issues for some.
The Providence Warwick Convention & Visitors Bureau declined to comment on Smiley’s proposal after it was unveiled on Jan. 6 as part of his 2025 legislative priorities that include several other measures to narrow a projected deficit of at least $14 million in the next fiscal year.
Spokesperson Alana O’Hare said the bureau wouldn’t weigh in until the proposed parking tax had moved further along in the legislative process.
Kenneth Zorabedian, founder and president of United Parking LLC
in Providence, acknowledged that, if approved, the tax would likely be passed on to customers.
While Zorabedian said the proposed rate would probably be manageable, he said his company and his customers wouldn’t be able to tolerate much more before the pinch became painful.
“I hope the General Assembly is conscious of the effect anything higher could have,” he said. “Because anything more than 7% and we’re going to have a problem. You’ve got to remember there’s a lot of people who work in places like the bars and restaurants that are already paying hundreds of dollars a month.”
The tax for parking in private lots was one of the recommendations made a year ago by a special commission appointed by the City Council to examine how Providence could revamp its tax structure.
The commission also called for a tax on tickets for special events in Providence.
That idea never made it to the General Assembly, according to Smiley spokesperson Josh Estrella, who said it was only considered as one of the options recommended by the commission, which found a 5% tax on ticketed events could yield $2.8 million a year.
A rough preliminary analysis by the Smiley administration found the city could raise about $1.8 million a year from the parking tax.
Parking has long been a hot-button issue, with some decrying minimum parking requirements for new housing developments as hampering the construction of much-needed units.
According to the Providence Streets Coalition, a 2023 national report by the nonprofit Parking Reform Network indicated that parking lots make up 24% of Providence’s downtown, even though 20% of Providence households don’t own a car.
The idea of taxing parking is nothing new. Numerous cities nationwide have long had sales taxes on commercial lots and parking garages, most ranging from 10% to as high as 22.5% in Philadelphia.
Asked if there was any concern the tax may hurt workers employed in Providence who have no choice but to park in the city, the administration insisted there is plenty of street-side parking available.
Last year, the city purchased more than 1,100 new single- and multi-space parking meters using redirected American Rescue Plan Act funds.
Smiley has alluded to the fact that private commercial parking lots aren’t always the most sympathetic business group, with criticism often coming from advocates for open space, architectural aesthetics and environmental concerns from traffic congestion and fossil fuels.
“There are better uses of city land,” he said.