Expiring commuter tax break will cost public transit users

Whenever you're tempted to curse traffic as you head to and from work next year, aim some of your epithets at Congress. (Like you needed another reason!)

That legislative body has encouraged workplace benefits that reward drivers who commute rather than those who take public transportation to and from their jobs.

Catching some ZZZZZs on the way into work. Photo by Alexander Baxevanis/futureshape via Flicker Creative Commons.

And the disparity is about be more starkly displayed in the New Year unless Capitol Hill takes action.

Commuter benefit parity ends: On Jan. 1, 2014, commuters who use rail, bus or van pools could see their annual commuting cost increase up to $1,380 a year. That's because the federal transit commuter benefit they receive via their employers will drop from $245 to $130 per month.

Drivers, however, will see their workplace parking benefit automatically bumped up to $250 per month.

Of course, not all companies offer workers transportation benefits. But those that are available are skewed in favor of motorists.

In recent years, Congress has tried to alleviate the disparity in the mass transit/automotive employee benefits. Since 2009, federal lawmakers have temporarily raised the public transportation perks to bring them more in par with those given drivers.

But temporary is the key word. The current public transportation benefits expire on Dec. 31. The driving benefit, however, is statutorily tied to inflation so it increases a bit in the coming year.

Many environmental activists are livid that Congress has let this law slip. At a time highway congestion is increasing and concerns are raised about the role of fuel emissions in climate change, they see it as reprehensible that Uncle Sam is essentially blessing more drivers.

And there's also the basic fairness issues of the two tax breaks.

"Reducing the benefits for public transit riders at the same time that this tax benefit is adjusted upward for auto drivers diverges from a balanced federal tax policy that treats different modes of travel equitably," said Michael Melaniphy, the president of the American Public Transportation Association, which represents transit agencies around the country, in a statement posted on the group's website.

Other extenders ending, too: The hope is that members of Congress will address this, as well as the other 50+ tax extenders that expire Dec. 31, as soon as they return to Washington, D.C., in January.

But while may tax breaks that are renewed retroactively doesn't pose a problem for filers because they are dealt with the following year when they file their tax returns, the commuting benefits work differently.

In most cases, employers provide workers with prepaid cards -- loaded with pretax dollars taken from their paychecks much the way that medical flexible spending accounts work -- that commuters then use to pay for their modes of mass transit. Without authorization of the higher amount, the workers will have to cover their transportation costs out of their own pockets.

So if you get employer help in taking public transportation to work, for the foreseeable future pick up a few more quarters on your way out to make sure you get to and from the office.

Commuter savings: I admit it. I like driving. But I hate traffic.

And I loved it when the hubby and I lived in Washington, D.C., and the Maryland suburbs and had access to trains to get around.

To a kid from a small West Texas town, taking the Metro locally or Amtrak when we vacationed was such a cool, big city thing.

And for workers, public transport can also can be a big money saver.

The American Public Transportation Association's Transit Savings Report for December 2013 finds that mass transit riders can save, on average, more than $825 this month than their driving counterparts. That's $9,901 annually.

APTA ranks the top 20 cities with the highest public transit ridership in order of their transit savings based on the purchase of a monthly public transit pass.

City	Monthly Public Transit Savings	Annual Public Transit Savings
New York	$1,239	$14,866
Boston	$1,083	$13,000
San Francisco	$1,080	$12,961
Philadelphia	$998	$11,971
Chicago	$974	$11,683
Seattle	$966	$11,591
Honolulu	$956	$11,475
Los Angeles	$926	$11,115
San Diego	$878	$10,535
Portland	$865	$10,380
Baltimore	$857	$10,288
Minneapolis	$852	$10,223
Denver	$842	$10,102
Washington, D.C.	$835	$10,023
Pittsburgh	$814	$9,762
Cleveland	$806	$9,673
Miami	$790	$9,475
Atlanta	$779	$9,350
Dallas	$766	$9,186
Las Vegas	$753	$9,039

Monthly and annual amounts may differ slightly due to rounding.

The savings shown above, says APTA, also factor in local gas prices ($3.22 per gallon as reported by AAA on Dec. 17, 2013) and the local monthly unreserved parking rate.

You also might find these items of interest:

• Taxing environmentally conscious drivers
• When traffic and taxes collide
• Tax break sends mixed message to motorists

Comments

[Larry Morris]

Here's a list of the cities with the most people who bike to work!

http://www.towncharts.com/Top-500-Cities-in-the-US-for-People-Who-Bike.html

[Stephanie Chen]

This is going to push so many people back into their cars. Convenience is always the main factor with deciding to take public transportation, but I'll usually put up with some inconvenience if I can put some money back in my pocket.

I live in a part of the country now where I'm pretty much forced to drive, but I used to take the train to both school and work and the benefit was a big help - every little bit helps, doesn't it?