PORTLAND — At least two city councilors said Monday that they would consider restoring a driver perk that allowed free parking for the first hour in city-owned garages.

But if the idea catches on, drivers could pay an hourly rate of $3 after the first hour — a significant increase over the $1.25 hourly rate now charged at Portland’s two garages.

The idea for the hour of free parking — which was discontinued by the city in 2010 — is a response to a proposal made this month by City Manager Mark Rees to raise hourly parking rates in the city-owned Elm Street and Spring Street garages from $1.25 to $1.75.

The rate increase is in Rees’ municipal budget for the fiscal year that starts July 1. It has been endorsed by the City Council’s Finance Committee, but is unpopular with downtown merchants.

Rees’ proposal would raise $160,000 in new revenue and bring parking rates in the city-owned garages closer to market rates. Privately owned garages charge an average of $2.70 an hour.

“I’d like to explore making the first hour of parking free,” said Councilor John Anton at a budget workshop Monday night. “Even if it’s $3 for the second hour, it’s a much better marketing approach.”

Councilors met to put the finishing touches on the municipal budget, which is expected to be voted on next week. Public comment was not allowed Monday, but will be allowed next Monday.

After Rees’ parking proposal became public, it drew a mostly negative reaction from the downtown business community, which said the increase would discourage visitors from coming to Portland and would hinder the city’s economic development efforts in the arts district.

Jan Beitzer, executive director of Portland’s Downtown District, which represents downtown merchants, attended Monday’s budget workshop.

“It represents a 40 percent increase in parking fees,” Beitzer said after the meeting, referring to the proposed increase to $1.75. “On its face, it is too high. … We just think it’s not good economic development policy.”

Beitzer said Anton’s proposal for an hour of free parking might work, but it does not bind future councils to honor such a system.

She pointed to Portland’s parking meter forgiveness program, which let parking offenders off the hook for their first ticket. That policy, she noted, was eliminated by the council two years ago.

“I don’t think people would object to a reasonable increase in parking garage rates, but the businesses were shocked with the 40 percent increase,” Beitzer said. “We think parking rates should be based on the economic development picture rather than on the city’s revenue picture.”

Councilor Cheryl Leeman criticized Anton’s idea, saying someone who wants to see a performance at Merrill Auditorium would rather park on the street than pay $3 an hour for parking.

“I don’t want to pay $3 an hour for parking and I don’t think the public wants to. Why would the city want to put itself at a competitive disadvantage?” Leeman asked.

But Councilor Ed Suslovic said he found Anton’s idea intriguing enough to explore further.

Suslovic urged the city’s parking manager, John Peverada, to meet with the Portland Downtown District to gauge the business group’s reaction.

“I don’t know enough about parking and shopping, but these are interesting options,” Suslovic said.

The budget vote on Monday could get complicated. Councilor David Marshall announced that he plans to make a motion to keep the hourly rate at city-owned garages at $1.25.

“If it goes back to $1.25, it will create a $160,000 hole” in the city budget, said Mayor Michael Brennan.

Regardless of what the city decides, Peverada said, visitors should not forget its Park & Shop program. A person who buys goods or services at a downtown business is issued a stamp that’s good for one hour of free parking.

Staff Writer Dennis Hoey can be contacted at 791-6365 or at: [email protected]