A look at the effects of paid parking on Dickson Street HMR tax collections

A paid parking kiosk stands near the corner of Dickson Street and West Avenue in Fayetteville.

Photo: Todd Gill

Since beginning our regular HMR sales tax reports earlier this year, we’ve had several requests to publish a more specific report showing only the numbers from the Dickson Street area since the city’s paid parking program began in mid-August 2010.

The two-year-old program, which includes a system of kiosks, gated lots, on-street numbered parking spaces and residential parking boundaries, is responsible for a vastly different atmosphere in a roughly two-square-mile area around Dickson Street.

What people are after now is some information to help support or debunk the belief that paid parking is hurting Dickson Street businesses.

The self-reported HMR collections aren’t the best indicator of business activity since they only apply to hotel, motel and food purchases, and don’t include alcohol or retail sales. Sales tax numbers would provide better insight, but state law restricts sales tax data from being publicly linked to specific businesses.

City officials began tracking HMR figures in the Dickson Street area shortly after paid parking went into effect, and separated the data going back to September 2009 in order to provide some historical perspective. Paul Becker, the city’s finance director, provided that report to us last week and here is what we found:

  • Of the 22 months since paid parking began in the Dickson Street area, 17 months showed an increase in HMR collections compared to the prior year.
  • Dickson Street area HMR collections were up 9.4 percent since September 2010, compared to an 8 percent citywide increase during the same period.
  • Dickson Street area HMR collections were up 11 percent in the first six months of this year compared to the first six months of 2011, and were up 17 percent compared to the first six months of 2010.

Included below is a graph reflecting HMR collections from September 2009 through August 2010, and for the same two following periods using all data available up to this point. A chart is also included with specific collection amounts.

For those who’d like to see the raw data, here is a link to the full report (PDF here).

Looking at the tax figures, it’s clear that collections have grown on Dickson Street since the implementation of paid parking, but there are still arguments on both sides of the issue.

Some will say the data proves that paid parking has had no overall negative effect on the businesses in the area. Others may contend that the numbers should be higher and are only an indication that the economy has improved or that the dramatic increase in enrollment at the University of Arkansas has boosted sales.

What do you think?

A&P Funds

Legislation created the Advertising and Promotion Commission in 1977 with the passage of the Hotel, Motel, Restaurant (HMR) tax in Fayetteville. The 2 percent tax is split equally between the city’s Parks and Recreation Department and the A&P Commission. The parks money is used for parks maintenance, operations and for capital improvements. The self-reported numbers do not include retail or liquor sales.

» See recent collection totals
» See full 2011 report (PDF)
» See full 2010 report (PDF)

By state legislation, all HMR funds shall be used:
1. for advertising and promoting the city and its environs
2. for the construction, reconstruction, equipment, improvement, maintenance, repair, and operation of a convention center
3. for the operation of tourist promotion facilities in the city
4. for personnel and agencies necessary to conduct the business of the A & P commission

HMR funds can also be used for:
1. for funding the arts
2. for operation of tourist-oriented facilities
3. for construction, reconstruction, repair, maintenance, improvement, equipping and operation of public recreation facilities and for the payment of bonds.

Taxes shall not be used for:
1. general capital improvements within the city
2. costs associated with general operation of the city
3. general subsidy of any civic group or chamber of commerce

Source: Arkansas Code / § 26-75-606 – Use of funds collected