Schumer Reveals: Federal Commuter Benefits Twice As Much For Drivers Than Mass Transit Riders - Absolutely Backwards In The Age Of Record Gas Prices And Nation's Crippling Dependence On Foreign Oil

Press Release

Schumer Reveals: Federal Commuter Benefits Twice As Much For Drivers Than Mass Transit Riders - Absolutely Backwards In The Age Of Record Gas Prices And Nation's Crippling Dependence On Foreign Oil

Schumer-Authored Legislation Would Dramatically Boost Tax Breaks For the Record Number Hudson Valley Commuters Who Ride Metro-North- Cut Commuting Costs by a Third

Typical Metro-North Monthly Pass Now $230, but Federal Mass Transit Tax Break Only Covers First $115, Just More than Half As Much as the Benefit Given to Drivers

Schumer: Boosting Mass Transit Benefit a One-Two Punch Against the Energy Crisis - Takes Cars Off the Road and Puts Money Back in Commuters' Pockets

With gas prices through the roof and record numbers of Metro-North commuters turning to mass transit, US Senator Charles E. Schumer today unveiled a plan that would double the federal mass transit benefit for people who take Metro-North and other mass transit to work, saving them hundreds of dollars per year in transportation costs, increasing energy conservation, and reducing traffic, congestion and smog. Under current law, employers are able to offer employees a monthly tax-free transit benefit of only $115 dollars to cover mass transit commuting costs (such as a Metro-North monthly pass), but they are able to offer up to $220 to help cover parking costs for people to drive to work. Schumer today said that, in the age of record high oil and gas prices, it makes absolutely no sense to provide drivers a far greater benefit, and thereby a significant financial incentive, to drive to work rather than take mass transit.

With record numbers of Hudson Valley residents leaving their cars at home because of skyrocketing gas prices, Schumer said that the current transit benefit barely covers half of the typical Metro-North monthly pass. However, under his plan, which would equalize the mass transit and parking benefits at $220 per month and index them to increase with inflation, most Metro-North riders would now be fully covered and could save hundreds of dollars per year. According to the TransitCenter, Hudson Valley commuters would save over $750 annually from this change for those with the longer commutes here in NY.

"Boosting the mass transit benefit is a win-win in the age of sky-high gas prices: it puts money in commuters' pockets and takes more cars off the road," said Schumer. "The mass transit subsidy program is a great idea, but it is undermined by the fact that we provide a parking benefit that is much more generous. My proposal makes mass transit financially attractive, so commuters will be more than happy to leave their car keys at home—saving them hundreds of dollars, conserving energy and clearing up congestion and traffic along our busiest expressways."

The transit and parking benefits, originally conceived by the late Senator Daniel Patrick Moynihan, allow employers to offer their employees up to $115 per month in transit benefits tax free, but they can offer up to $220 tax-free for parking costs. While the transit benefit typically reduces a commuter's transportation costs by a third or more, the significant disparity between the two benefits creates an inefficient incentive for people to drive to work rather than take mass transit.

In the New York metro area alone, commuters typically save well over $150 million a year because of the transit benefit. Employers have saved significantly as well, over $35 million since the benefit went into effect in the New York area. Schumer also said that establishing parity between the parking and transit portions of the transportation fringe benefit would provide effected commuters with a tax savings twice that of the recently passed stimulus bill and would get more people out of the cars and into transit

After recent fare hikes, the price of the typical Metro-North monthly pass now far exceeds the maximum benefits allowed under current law. Right now, most commuters pay well more than the $115 benefit now available, but under Schumer's plan would be fully covered.

BREAK IN TRANSCRIPT

Source