Photo courtesy Slack Action

When the federal stimulus package was passed two years ago, it provided one key provision benefiting transit commuters nationwide– an increase of the monthly transit benefit from $120 to $230, matching that of the parking benefit.  Just around this time last year, the increase in the transit benefit was due to expire the following January had Congress failed to approve an extension.  Luckily, that fate was avoided, which allowed transit commuters to reap the same tax-deductible benefits as drivers for 2011.

Unfortunately, the extension was only for this year, which brings up the matter before Congress again.  If Washington doesn’t act on the benefit extension before the end of the year, drivers will be getting a higher direct federal commuting subsidy than transit users come 2012.  I’m not convinced this is a good direction for the country’s transportation policy, and neither does Transportation for America:

If Congress does nothing by the end of the year, if you take transit to get to work each day you could be paying more out of your own pocket when the tax benefit for transit is cut in half. If that wasn’t enough, drivers will keep enjoying the same great parking benefit ($230) – nearly double what transit commuters will be eligible to receive. We don’t think that’s fair, and Congress needs to hear about it.

So if you spend more than $120 a month on your commute in a vanpool, train or bus, the federal government will be sending a message loud and clear: they’d like you to start driving to work, where you can get $230 for parking deducted from your paycheck tax free.

Be sure to tell Congress that slashing the transit benefit is the wrong thing to do at the wrong time.  While Washington State Senators Murray and Cantwell are already strong transit allies and are likely to approve the extension, many House representatives are not and can’t be counted on to do the same.

7 Replies to “Tell Congress to Extend the Transit Benefit”

  1. If we went with a paid parking model for LINK/Sounder, this could be to transit’s benefit. Imagine “commuters” doing 5 mile jaunts to LINK and Sounder stations. Paying a parking fee and getting reimbursed by the Feds, and having that circulate into transit budgets.

  2. Both benefits deserve the axe. If drivers and commuters didn’t get these tax breaks, bicycling would look even better. And bicycling puts way less stress on the roadways than buses, and is healthier.

    Sorry, but these kind of social taxes deserve to die.

    1. If you cut the parking benefit, you unintentionally give employers and incentive to make parking free, rather than charge for it – if the cost of parking is officially “free” and the real cost of providing it is simply factored into the employees’ salaries, employees are effectively paying for parking out of pre-tax income. On the other hand, if the parking tax break were removed and the employer charged for parking, now they’d be paying for it out of after-tax income.

      In order to really tax parking right, you’d need to take the construction and maintenance cost of the parking facility, divide by the number of employees, and use that to count the actual value of “free” parking as taxable income. Of course, a rule like this would be nearly impossible to enforce fairly, which is just one reason why it will never happen. So we’re left with a parking income tax deduction as the only way for the tax code to avoid incentivizing making parking free.

      1. “Free parking”

        Well, with land use planning in the suburbs requiring buildings to have sufficient parking, it is “free” just as you describe. In the core cities of Seattle, Tacoma, Bellevue, it’s not free, it’s metered. So for an employer to offer “Free” parking, they clearly have to buy it for their employees. My employer gives us the $160/month rebate, if you submit the receipts. That covers most people’s monthly parking cost. They also provide the free Orca pass via that heavily discounted pass program, and bicycle cages, showers, lockers and towels.

        So it’s pretty agnostic about how you get to work. But we truly want people to stop driving their cars, then the “free” parking has to go away. Thing is, the “free” bicycling facilities & Orca pass might go with that. Still with that heavy discount the Orca pass costs the company way less that it would cost us employees to buy one. And since I bicycle most days, I doubt I’d bother to get one.

    2. Agreed. The ideal solution would be to cut both the transit and parking tax writeoff (why should those who work from home, walk or bike be subsidizing those who don’t?) cutting only the transit while keeping the parking is pretty naked “SOCIAL ENGINEERING!!!!11!!”

  3. Don’t want to be the skunk at the party, but transit users already receive a very large subsidy from the FMVT and general revenues. True, nearly all of that goes for capital expenditures, but if transit agencies has to buy their own buses and trains new vehicles would be few and far between.

    Yes, drivers are subsidized, but less as a percentage of the cost of operation. I think that’s been clearly shown.

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