Commuters Could Feel Brunt of Recession If Benefit Not Extended
Public transit users and lobbyists are scrambling to get Congress to extend a pre-tax benefit for employees nationwide that will be cut nearly in half on January 1.
A petition site consisting of groups like Employers Council on Flexible Compensation and Visa has already sent thousands of letters to Congress urging them to keep the current $230 monthly benefit. If Congress doesn’t extend this benefit, it will be reduced to $120 each month. However, car and parking benefits will remain at $230 a month each.
The American Public Transportation Association (APTA) has reported that in 2010, ridership on public transit increased 38 percent versus a 21 percent increase in car usage. Each year, there are 10.2 billion public transit trips – 35 million weekly trips. Despite this, transportation agencies across the country are continuing to cut services and raise fares even as taxes that pay for highways and roads has stayed the same since 1993.
In the economic recession, public transit has saved American families almost $10,000 a year in commuting costs and cutting commuting benefits could mean fewer options for lower-income commuters.
In 1998, Congress amended the tax code to allow employers to give employees a pre-tax benefit to help pay for commuting costs in hopes of reducing traffic congestion and improving air quality. Congress raised the benefit to $230 a month in 2009 to equal the car and parking benefits.
If Congress doesn’t act before December 31, employees who rely on public transit, especially in large cities with considerably higher transit costs, will feel more of the brunt of this benefit decrease.
Photo credit: Jcornelius