Dyster may levy a new tax on surface parking lots, including state park

In order to close an annual operating deficit that still exceeds $12 million, the administration of Mayor Paul Dyster is considering a new tax on commercial parking lots that operate within the city’s tourism district.  Parking is a lucrative cash business during the summer tourist season when lots operate near capacity for 90 to 120 days, depending on the weather.

“Frankly, it’s the easiest and quickest way for the city to close this budget gap,” explains one longtime observer of Niagara Falls politics. “The parking lot operators are the only people making enough money to make a dent from a revenue perspective.”

It’s unclear whether the Dyster administration will levy the tax as an annual or one-time licensing fee, as a per vehicle surcharge, or as a percentage tax on parking revenues. Rumor has it that senior administration officials are torn. City Administrator Nick Melson is said to favor a $100,000 annual licensing fee on surface lots west of Third Street, which could generate upwards of $1 million annually.

Others, rumored to include Community Development Director Seth Piccarillo, favor a one-time licensing fee of $600,000 supplemented by a per vehicle surcharge of $5.  That levy could generate $5 million annually on a sustained basis while generating substantial one-time licensing fees initially.

Given the City’s limited options, it might be the only politically palatable path forward.  It’s unclear if a change in state law will be necessary to levy the surcharge against parking lots operated by the New York State Parks Department, but Governor Andrew Cuomo is thought by political operatives to support the arrangement.

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