Tuesday, 14 December 2010 00:00
The Long Island Rail Road’s (LIRR) upcoming fare hikes have been well-chronicled but will nonetheless be noticed as a monthly ticket into New York City rises next month to $223 from $204 in western Nassau (zone 4) and to $254 from $232 in eastern Nassau (zone 7).
Less media coverage, however, has been given to Congress’ inability as of this writing to renew for 2011 a provision in 2009’s American Recovery and Reinvestment Act that eased a LIRR commuter’s financial burden while encouraging drivers to take mass transit. The measure in question increased, to $230 from $120 per month, the maximum amount of money a commuter can set aside for their mass transit costs using pre-tax dollars. The $230 is withheld by a commuter’s employer and must be spent on commuter rail, subway and bus transportation, eligible van pools, or commuter-related parking.
U.S. Senator Charles Schumer highlighted his support for the initiative in a TV advertisement this fall. Now that Election Day is over, and Senator Schumer has secured another six-year term, it is the nonprofit TransitCenter, which administers the TransitChek program for the city’s participating employers, that is sounding the alarm about the Dec. 31, 2010 expiration of the $230 monthly pre-tax cap [full disclosure: I am a TransitChek user].
Bennett Midland, an independent management consulting firm retained by TransitCenter, determined in August that if the pre-tax limit were to revert back to $120 a month, from $230, a commuter using the benefit, and spending $230 a month on mass transit, would see their effective commuting costs increase by 18 percent. That figure was based on the assumption that a typical commuter has 31.6 percent of their income withheld by their employer for taxes, according to a September TransitCenter white paper. The Bennett Midland analysis also noted that a substantial drop in the allowable amount of payroll monies that an employer can deduct on a pre-tax basis for their commuter employees would likely lead to a decline in mass transit usage, thereby decreasing revenues for commuter rail systems and putting more cars on the road.
The Metropolitan Transportation Authority’s (MTA) latest round of price increases, it should be noted, raised bridge and tunnel fares at MTA facilities only 5 percent for EZPass users while LIRR ticket costs grew almost twice as much, in percentage terms.
Too many New York City-based lawmakers have a soft spot for drivers who clog the region’s roadways, as was illustrated when the city-controlled state Legislature left every toll-free bridge into and out of Manhattan toll-free when bailing out the MTA in 2009.
Indeed, it was a consortium of New York City transportation, business and civic groups that launched TransitCenter in the 1980s, and it has since expanded to include employers nationwide. The back story: U.S. employers use commuter parking as a tax benefit for themselves and their employees. TransitCenter discovered a lesser-known benefit when developing TransitChek; allow employers to lower mass transit costs for their employees. The popularity of TransitChek has grown but its future depends on Congress’ willingness to encourage the use of mass transit.
Mike Barry, a corporate communications consultant, has worked in government and journalism. Email: MFBARRY@optonline.net