In a subtle yet sharp twist to city parking, San Diego parking meters are set to cost drivers more—not by raising hourly rates again, but by quietly passing on credit card transaction fees to the public. This new surcharge, expected to bring in up to $1 million a year, comes as part of a budget fix to protect public services from cuts. While the city once absorbed these fees, officials now aim to recover costs directly, marking yet another careful step in balancing convenience with rising fiscal pressure.

STORY HIGHLIGHTS

• Credit card surcharge (~3%) to be added at San Diego parking meters

• Follows earlier hike: meter rates doubled to $2.50/hour in February

• Part of a budget plan to avoid library and rec center cutbacks

• Projected $1M revenue, though mayor estimates $750K due to vendor delays

• Paid parking expanding to Sundays, Petco Park, Zoo, Balboa Park, beaches

• Legal backing under Proposition 26 cited by city attorney

• Coincides with city’s response to $300M budget gap after failed sales tax

• Daylighting fines raised, projected to bring in $850K this year

In a move that could soon hit motorists’ wallets harder, San Diego is preparing to implement a new policy that will require drivers to cover the cost of credit card transaction fees when paying at city parking meters. The decision, which comes on the heels of several other parking-related fee hikes, is projected to generate up to $1 million in annual revenue and is part of a larger effort to plug significant holes in the city’s strained budget.

Parking in San Diego has already become more expensive this year. In February, hourly rates at city meters doubled from $1.25 to $2.50. Now, that cost is set to rise even further—not due to another rate increase, but because drivers will soon have to pay a credit card surcharge of approximately 3% on every transaction.

The policy was introduced last month as part of a broader budget compromise between the City Council and Mayor Todd Gloria. By passing on credit card fees to the public instead of absorbing them, city leaders were able to redirect funds and stave off several proposed service cuts.

“This change was critical to preserving library and recreation center hours,” a group of four councilmembers—Henry Foster, Joe LaCava, Kent Lee, and Sean Elo-Rivera—explained in a joint statement. “We view this as a reasonable and necessary adjustment that aligns with how other departments already operate.”

While Mayor Gloria praised the proposal, he exercised caution in forecasting its impact. In his June 17 veto message, he estimated the new fee would generate around $750,000 in the first year—less than the council’s $1 million estimate.

“The city treasurer will need about three months to negotiate the changes with vendors and banking partners,” Gloria said. “That timeline affects how quickly we can realize the full financial benefit.”

However, the councilmembers behind the proposal believe the mayor’s estimate is too conservative. They pointed out that the city spent nearly $1 million last year on credit card processing fees—during a time when meter rates were significantly lower for more than half the fiscal year.

“The figure we’ve proposed may, in fact, understate the real revenue potential,” the group wrote in their budget memo. “With higher meter rates in place and expanded paid parking on the horizon, the numbers are likely to climb.”

Indeed, the city has already approved a range of parking expansions that could fuel additional revenue. Sunday metering, $10-per-hour spaces near Petco Park, and increased meter coverage in neighborhoods citywide are all on the docket. Officials are also finalizing plans to charge for parking at major public attractions, including the San Diego Zoo and across Balboa Park.

And that’s not all. Negotiations are reportedly underway with the state Coastal Commission, as the city seeks to bring paid parking to Mission Bay Park and municipal beach lots—some of the most heavily visited areas in the region.

As city officials push forward with these changes, they have also leaned on legal validation. A memorandum issued in May by City Attorney Heather Ferbert provided the legal green light for shifting the transaction fees to users.

“The City may be able to charge the public for credit card transaction fees on parking meters,” Ferbert wrote. “That is part of the City’s cost of administering the parking meter program. Charging the public for this fee is part of the City recovering its program costs, which is likely valid under Proposition 26.”

The councilmembers also noted that similar fee structures are already in place in departments such as Public Utilities and during in-person transactions with the City Treasurer. They dismissed concerns over logistical delays, saying the infrastructure is largely ready.

This latest change arrives amid a broader scramble for revenue in the wake of the city’s failed sales tax initiative last November. After voters narrowly rejected a one-cent sales tax hike, San Diego was left facing a budget deficit hovering around $300 million.

Since then, the city has turned to a wide array of fee and fine increases. Among the most visible has been the rollout of stiffer penalties tied to a new “daylighting” law—state legislation that prohibits parking within 20 feet of an intersection, aimed at improving visibility and pedestrian safety.

The fine for violating that law jumped from $77.50 to $117 on March 1, just two days after enforcement began. Through the end of May, more than 6,000 tickets had already been issued, and the city’s independent budget analyst has projected that these fines could bring in as much as $850,000 in the current fiscal year.

So while parking in San Diego is becoming a more costly affair, city leaders argue these shifts are necessary to maintain essential services—and to align payment structures with actual program costs.

“We’re simply asking the public to cover a fee that reflects the true cost of using credit cards at meters,” the councilmembers concluded. “It’s a small change, but one that could help sustain services citywide.”

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