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Pay Stub Parking Plan

Managing the demand for employee parking with salary-based parking rates
University Business, April 2013

Clark Kerr, one-time president of the University of California system, once characterized the university as “a series of individual faculty entrepreneurs held together by a common grievance over parking.” It’s a lighthearted definition, but one rooted in truth.

For decades, higher ed has grappled with how to balance the demand for parking with the capacity of campus parking systems. Students, faculty, and administrators often want more parking. Certainly, some campuses need it. For many, though, the problem is not the number of spaces, but that existing spaces aren’t managed equitably.

Attempts to correct this have included implementing parking fees based on employee salary. If a college features sufficient peripheral parking but demand exceeds supply at the campus core, implementing a pricing system is a rational form of rationing a scarce resource. Salary-based parking attempts to achieve a balance.

Egalitarian ways

Charging for parking is one of the simplest ways to manage parking demand. Institutions have pricing programs in place not to generate revenue—which many students and faculty members are unaware of—but to address a mismatch between supply and demand, particularly in those campus areas that are busy commercially or feature mixed-use development.

The inability to find a parking space is often more of a problem than the need to pay for one. So, for a parking-pricing program to be effective, it should fairly allocate existing spaces. Pricing impacts travel behavior and helps reduce demand for parking, as individuals are encouraged to walk or bike to the college or university instead of drive, participate in carpools, or ride public transportation.

Salary-based parking rates are one way to manage parking demand through pricing. The concept buys into a time-honored campus principle of egalitarianism: If students must pay for parking (typically done through a pricing system or tuition fees), why shouldn’t faculty and staff pay as well? And, if so, does one price fit all?

These programs may involve:

  • Fees based on a small percentage of an employee’s yearly salary. The salary amount would not include overtime or chair stipends. Faculty, staff, and teaching assistants at Rutgers University (N.J.) pay a fee of 0.001 percent of their annual salary. Meanwhile, at the University of Illinois, employees pay 0.7 percent of their salary. The maximum rate is $40 per month, resulting in an average annual rate of $242.
  • Tranche systems, or paying fees based on annual salary levels. At Lehigh University (Pa.), prices range from a high of $96 (for employees making $60,000 or more) down to $24 (for employees earning $20,000 or less). And at Towson University (Md.), employees making at least $80,000 pay $715, while those at $15,000 or under pay $75.
  • A zone system, where employees pay fees based on both a percentage of their annual salary and the proximity of parking facilities. At the University of Vermont, employees wishing to park in “green” designated parking facilities (“core parking”), pay 0.56 percent of their annual salary. White zone users pay 0.42 percent and orange zone (peripheral parking) users pay 0.28 percent.

Salary-based programs are lauded for being more efficient than programs based on priority and seniority lists. Also, these programs better allocate spaces to primary user groups (faculty members, administrators, and students) based on a group’s individual parking needs.

Drawbacks and Concerns

Salary-based parking programs are not without their opponents. Many argue that when compared with flat-rate systems, salary-based fees encourage single-occupant vehicle use. That is, payers with lower parking fees have less of a financial incentive to carpool and are less likely to choose that alternative method.
Others say that parking is a commodity with a specific price tag associated with it. Studies have shown that one space in a conventional parking lot costs approximately $5,000 to build and maintain. One employee may pay less than another to park when each space costs the institution the same amount.

Another objection is that salary is not the only measure of wealth. Should lesser-paid employees with higher-paid spouses (or particular assets) get reduced fees?

Salary-based parking programs tend to lead to a greater pool of drivers having access to the most desirable parking, forcing parking lotteries and waiting lists—both which are less than transparent.

Income-Sensitive Options

Many institutions are finding that deviating from a fixed salary-based approach and opting for a program that implements income-sensitive options is more effective in resolving parking issues. University of Vermont’s “zone” program is one such example. An administrator at another university with such a program marveled at the number of employees who could afford the higher-priced parking “zone” yet opted for the lower-priced ones.

At one university, parking prices were affecting lower-paid employees, many of whom couldn’t afford to live near campus because of the high cost of living. This institution’s challenge was to structure a pricing scheme that recognized the financial challenges of these employees, while not providing a low-cost rate to all employees. The solution: Create one established fee and then offer discounts to eligible employees based on salary.

Same Frustrations

Without a doubt, parking is one of the most widespread and frustrating problems afflicting U.S. colleges and universities today. The institutions and campuses change, but the challenges of fairly pricing parking in a way that balances supply and demand remain the same. Could a salary-based parking rate program help add some fairness to the parking price puzzle on your campus?