Photo by Oran

In 2008 Congress roughly doubled* the ceiling for the amount of transit benefit that employees could take pre-tax from $120 a month to $230 a month. Not conincidentally, $230 a month is the amount employers can spend on free parking or parking subsidy for their employees without incurring tax penalties. The bill moved the status quo from the nonsensical position of net encouragement of driving to at least rough parity.

Unfortunately, the law that equalizes it sunsets on December 31st, and it appears unlikely that Congress will renew the tax subsidy in the current climate. Here in the Puget Sound, fares are generally low enough that only PugetPasses for fares of $3.50 and up will be affected: Community Transit intercounty, ferry, and some Sounder riders. But in systems where fares are much higher, it’s a big deal for transit riders.

* The numbers from the linked STB article and the Post article, are off by $5-10. I don’t know if the bill changed before passage or if there was some other sort of error.

5 Replies to “Federal Transit Subsidy to Expire, Parking Subsidy Intact”

  1. Regarding the $5-10 change: those are probably the ’07 or ’08 transportation fringe benefit limits. Before the recession-induced drop in inflation it used to rise five to ten bucks every few years, much like the 401k contribution limit or Social Security wage base.

  2. No longer shall I gripe about the modest subsidy I get on my $4 monthly orca pass, nor will I gripe about the cost of the pass itself. Some back-of-the-napkin math:

    My folks pay $287/month to commute 37 miles to and from New York City. The average Sounder rider pays $171/month for a $4.75 pass, covering the Tacoma to Seattle route, at 39 miles. There are an average of 20.75 work days in a month, for 41.5 trips.

    In New York, cost per mile assuming 41.5 trips of 37 miles: 18.69 cents.
    In Puget Sound, cost per mile assuming 41.5 trips of 39 miles: 10.56 cents.

    No more complaining about fare hikes, no sirree.

    (Nerd Alert Ahead. You’ve been warned.) Interestingly, the spread between single trip cost per mile and the monthly average cost per mile is dramatically different: 35.8 cents per mile at $13.25 per single fare is a difference of 17.1 cents per mile per trip saved over the whole month. Conversely, Seattle’s 12.1 cents per mile at $4.75 one way is a measly 1.61 cents per mile per trip saved over the month. Some gripe that our train system is designed primarily for the commuter crowds, but if commuter-versus-occasional rider fare equity was the metric, one could argue otherwise, and present evidence that a heavily mixed-use system like New York’s has a fare structure that places far greater costs on the occasional riders while subsidizing the 9 to 5 crowd. Seattle has far better fare equity, but those quantifiable benefits are hopelessly lost in scheduling deficiencies (as in, occasional riders don’t ride north on the 6.50am for a trip to the museum, as commuters wouldn’t typically take the fictional 11am train to work Downtown).

  3. How about lowering the parking subsidy to be equal to the transit subsidy? At least it would make parking equal to transit again and raise a bit of tax revenue our government desperately needs.

    NYC commuter train riders are going to really suffer – IIRC it was Chuck Schumer who was behind the increase in the transit benefit in the first place (not surprisingly).

    downintacoma – when I looked at Metro North monthly passes 2-3 years ago (I was considering a job in Connecticut), the pass had a breakeven of only 24 trips/month! Quite possibly the lowest breakeven for a monthly pass I’ve ever seen in the US.

  4. If you’ve ever reviewed the paperwork for what it takes to apply for, and maintain these subsidies and to get reimbursement, you’d be glad they did away with them!

    I would prefer they just keep the rates reasonably low.

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