Parking Tax Sets off Legal War
GALVESTON, Texas (CN) - Galveston parking lot owners who cater to cruise passengers sued the city's port authorities, seeking an injunction against a monthly tariff hike to $28.88 per parking space - fees the lot owners consider an "illegal 'tax.'"
Lead plaintiff Santa Fe Discount Cruise Parking dba EZ Cruise Parking sued the Galveston Wharves' board of trustees and the Galveston Port Facilities Corp. in Federal Court.
Around 600,000 cruise passengers come through Galveston annually with tourist dollars to spend on hotels and parking in the laid-back, palm-treed city that sits on an island 50 miles southeast of Houston.
EZ Cruise says in the complaint that it owns a 413-vehicle lot five blocks from the Galveston Cruise Terminal.
EZ Cruise also runs eight shuttle buses that take cruise passengers to the terminal.
Port officials approved a tariff in 2006 that requires "off-port" parking lot owners to "to pay a monthly $8.00 'access fee' for each and every parking space in their respective lot," the complaint states.
"On May 19, 2014, defendants amended the tariff, raising the monthly access fee charged to off-port parking users from $8.00 to $28.88 per-parking-space effective July 1, 2014. ... Defendants' stated objective for the 261 percent increase is to force plaintiffs to raise their prices to the point where they have to charge the same rates defendants charge for parking within the cruise terminal."
EZ Cruise and its co-plaintiffs claim the tariff is an illegal tax since they're already paying property taxes.
The tariff increase came out of a May 12 meeting of the Wharves Board's finance committee.
During the meeting the committee said the Galveston Port Facilities Corp. is running the terminal at a $1.48 million annual loss.
To make up the shortfall the committee proposed raising the parking tariff. According to the lawsuit, one member said: "The 261 percent increase is necessary for the Port to be competitive; the private parking lots will have to raise their prices and figure out a different way to manage their businesses, including cutting staff, because the Port needs to increase its market share of parking."
But EZ Cruise says the Port's alleged budget gap does not account for the terminal's revenue from two parking lots, and with that added in "the cruise terminal is actually operating at a profit in excess of $1.5 million."
Furthermore, EZ Cruise says, the port authorities aren't making the city's hotels pay the tariff, even though the hotels "provide cruise parking to hundreds upon hundreds of vehicles weekly."
EZ Cruise says the plaintiffs are "being asked to subsidize" the port authorities' failure to collect parking tariffs from hotel owners.
The plaintiffs sued for Shipping Act and Commerce Clause violations, regulatory taking without just compensation and illegal taxation.
They want an injunction against the tariff hike and a declaration that it is unconstitutional.
They are represented by Douglas Gilman with Gilman Allison of Pearland.