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A commuter tax benefit popular in the Washington area is set to expire at the end of this year if Congress fails to renew the tax break.
The Commuter Tax Benefit program, a federal mass transit tax benefit, allows workers to use up to $230 in pre-tax income each month for mass transit or vanpooling. An estimated 2.7 million Americans currently benefit from the program, with a 10th of those commuters living in the Washington area, said Tom Bulger, a board member with the Washington Metropolitan Area Transportation Authority.
The Washington metro area has the single largest number of commuters receiving the benefit, Bulger said. If the benefit is not extended, Metro estimates a 2.8 percent reduction in rail ridership.
“I think a lot of people would switch to singe occupancy cars, thereby exacerbating our congestion levels, which are the highest in the country,” Bulger said.
Employees using the transit benefit can save up to $1,200 annually.
The tax benefit was formerly $120 per month until Congress increased it in 2009 as part of the American Reinvestment and Recovery Act. Last year the benefit was extended through the end of this year. If Congress fails to act, the benefit will fall to $125 per month.
However, a parking benefit is set to rise to $240 per month, allowing for cost of living increases, although the parking benefit and commuter benefits are currently equal. Sen. Charles Schumer, D-N.Y. and Reps. Earl Blumenauer, D-Ore., and James McGovern, D-Mass., have each introduced bills in the House to maintain parity between the two benefits.
Jason Pavluchuk, a consultant and lobbyist for the Association for Commuter Transportation (ACT), said the loss of the commuter benefit would likely mean one in five people now using it would switch to a solo commute.
“When you’re talking about a 20 percent shift, it’s pretty significant,” he said.
Chris Simmons, ACT vice president, said his organization wants parity between the parking and commuter benefits. The commuter benefit is often offered as a perk for jobs in urban locations, he said, although it is also used for vanpooling in remote locations.
“It’s been successful in encouraging folks to find a different way,” Simmons said.
Commuting by mass transit or vanpooling, he said, is not only better for the environment, but over time is more efficient and less costly than solo vehicle commutes.
Bulger said commuters who are interested in having the commuter benefit extended should visit the website www.commuterbenefitsworkforus.com for guidance in taking action.
Jason
2:01 pm on Monday, November 21, 2011
They should zero out the parking and commuter tax benefit. They are subsidizing sprawl. The US is $15 trillion in debt.
Paul
2:52 pm on Monday, November 21, 2011
Jason- I do not agree at all; the transit portion of the commuter benefit saves millions of commuters hard earned money, and costs the federal government relatively little. It encourages people to get out of their cars and take transit; which helps reduce congestion, preserve the environment, and reduce reliance on foreign oil imports. The federal government should address the deficit - but not at the cost of executing a tax policy that would end up encouraging people to drive, and not take transit.
Jason
4:23 pm on Monday, November 21, 2011
Paul - I disagree, parking and commuter tax benefit should be eliminated. Every special interest says it costs the federal government just a little....then we end up having to rise taxes to pay for all these things or go into massive debt. Everyone needs to make better decisions of choosing where to live relative to there job location and understand the associated costs.
Paul
4:49 pm on Monday, November 21, 2011
Yes- but this is a tax benefit that is already in place. Eliminating it will amount to a tax increase for many. Employers that offer the benefit also save money on the benefit in payroll taxes- money that can be reinvested to create new jobs, which means new revenue.
cmvoorhees
5:33 pm on Monday, November 28, 2011
With all the congestion that we experience in the Washington DC area, the transit tax benefit gives the parking tax benefit to those that use commute using public transportation. It surprised me to learn that if I drove to work in DC, my tax benefit was greater than if I commuted with others. When and why did the parking tax benefit take place? Get rid of the parking tax benefit and save the commuter tax benefit as our region needs less cars on the road. Either that or everyone should be driving a hybrid that uses electricity when stopped in traffic.