Visitor tax

Day Two of my class is ongoing, and as you can see I do have some access to a computer. It's pretty limited, though.

Just wanted to highlight this article about the really high rental car taxes and fees in Houston. This is what happens when local governments get chicken about explaining their cost of doing business to the voters. The usual result - some out of town writer takes gratuitous cheap shots at Houston for its real and imagined sins, using rental car fees as an excuse to pile on, followed by local pols defending Houston's "world-class-city-ness" - is always good for a chuckle.

One point of interest:

The latest fee in Houston is called a "customer facility charge." This daily fee is earmarked to pay debt service on the $135 million, two-level rental car facility.

The new facility is widely regarded as the most modern of its kind in the country, and plans are under way for facilities in other cities.

But Houston still stands out.

Rent a car at Bush Intercontinental and fees you will have to pay include a 10 percent sales tax, an airport concession recoupment fee, a 5 percent Harris County Sports Authority fee and a vehicle title registration fee.

All the rental car agencies operating at Bush Intercontinental participated in the planning for the new consolidated rental facility, which is on a 140-acre site on the east side of JFK Boulevard. And they all agreed to the financing plan.

Marshall Fein, general counsel for Advantage Rent-A-Car and chairman of the committee of rental car agencies that put the deal together with the city, said no company could afford to construct a new facility.

"Frankly, no company could build this kind of facility anywhere around the country," Fein said. "We had to find another mechanism that could be sustained through payments. Wall Street bought it and they are happy with it."

State Rep. Martha Wong, R-Houston, criticized the rental car facility's financing setup when she was a Houston City Council member, before construction on the facility began.

"I was for the concept of putting them all together," Wong said. "What I wanted was have the rental car people pay for it because they are going to be the benefactors, rather than passing it on to the general public."

Martha, dear, if the rental car people were told to pay for the facility themselves, they still would have passed the cost on to the general public in higher rates, instead of the city-imposed "customer facility charge". Assuming, of course, that it got built in the first place - it's certainly possible that they would have decided to live without it if the city weren't ponying up. One way or the other, though, the end user was going to foot the bill. That's actually a justifiable reason for the fee, as it's directly connected to the experience of renting a car in Houston, unlike the airport concession recoupment fee (whatever that means) and the 5 percent Harris County Sports Authority fee.

(I must confess, I voted for the various sports stadia. Feel free to blame me for part of your rental car cost. If it makes you feel better, I occasionally feel guilty about it.)

Posted by Charles Kuffner on August 19, 2003 to Elsewhere in Houston | TrackBack