Schumer Announces His Plan to Double Tax Benefits for Bus and Metro-North Riders Included in Senate Stimulus Package
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SCHUMER ANNOUNCES HIS PLAN TO DOUBLE TAX BENEFITS FOR BUS AND METRO-NORTH RIDERS INCLUDED IN SENATE STIMULUS PACKAGE
Mass Transit Tax Break Right Now Only Covers $120 Worth of Commuting Costs Per Month, About Half As Much as the Benefit Given to Drivers for Parking
Absolutely Backwards In The Modern Age Of Conservation And with Nation's Crippling Dependence On Foreign Oil
Schumer's Plan Equalizes the Two Benefits and Takes Away the Incentive to Drive - Takes Cars Off the Road and Puts Money Back in Commuters' Pockets
With record numbers of Hudson Valley commuters turning to mass transit and the MTA budget crisis forcing round-after-round of fare hikes, U.S. Senator Charles E. Schumer today announced that his mass transit tax break has been included in the Senate version of the Economic Recovery package. The mass transit tax break would double the federal mass transit benefit for people who ride buses, Metro-North or other forms of mass transit to work, potentially 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 $120 to cover mass transit commuting costs, but they are able to offer up to $230 to help cover parking costs for people to drive to work. Schumer today said that, in today's economy, 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 New Yorkers leaving their cars at home, Schumer's plan equalizes the mass transit and parking benefits at $230 per month and indexes both benefits to increase with inflation.
"Boosting the mass transit benefit is a win-win because 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 homesaving 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 $120 per month in transit benefits tax free and up to $230 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 wellover $35 million since the benefit went into effect in the New York area. Approximately 15,000 companies in New York offer the transit benefit, covering about 650,000 employees.
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FOR IMMEDIATE RELEASE: January 27, 2009
SCHUMER ANNOUNCES HIS PLAN TO DOUBLE TAX BENEFITS FOR BUS AND METRO-NORTH RIDERS INCLUDED IN SENATE STIMULUS PACKAGE
Mass Transit Tax Break Right Now Only Covers $120 Worth of Commuting Costs Per Month, About Half As Much as the Benefit Given to Drivers for Parking
Absolutely Backwards In The Modern Age Of Conservation And with Nation's Crippling Dependence On Foreign Oil
Schumer's Plan Equalizes the Two Benefits and Takes Away the Incentive to Drive - Takes Cars Off the Road and Puts Money Back in Commuters' Pockets
With record numbers of Hudson Valley commuters turning to mass transit and the MTA budget crisis forcing round-after-round of fare hikes, U.S. Senator Charles E. Schumer today announced that his mass transit tax break has been included in the Senate version of the Economic Recovery package. The mass transit tax break would double the federal mass transit benefit for people who ride buses, Metro-North or other forms of mass transit to work, potentially 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 $120 to cover mass transit commuting costs, but they are able to offer up to $230 to help cover parking costs for people to drive to work. Schumer today said that, in today's economy, 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 New Yorkers leaving their cars at home, Schumer's plan equalizes the mass transit and parking benefits at $230 per month and indexes both benefits to increase with inflation.
"Boosting the mass transit benefit is a win-win because 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 homesaving 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 $120 per month in transit benefits tax free and up to $230 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 wellover $35 million since the benefit went into effect in the New York area. Approximately 15,000 companies in New York offer the transit benefit, covering about 650,000 employees.
Below is how the increase in benefit would help Hudson Valley Metro-North commuters:
Originating Station
Price of a Monthly Pass to Grand Central
Percent Covered Under Current Benefit
Percent Covered Under Schumer Plan
Poughkeepsie
$367
33%
63%
Croton Harmon
$221
54%
100%
Yonkers
$169
71%
100%
Port Chester
$205
59%
100%
New Rochelle
$169
71%
100%
Mount Vernon
$169
71%
100%
Brewster
$300
40%
77%
Mt. Kisko
$261
46%
88%
White Plains
$191
63%
100%
According to a survey by The Transit Center, a leading advocate for increasing the transit benefit and creator of the nation's first transit voucher, 24% of Metro-North daily riders take advantage of commuter benefit programs. The added subsidy will not only benefit employees, but will also provide additional tax-relief for businesses who contribute to their employees' deductions and will encourage employers to become involved in the transit choices of their worker.
Schumer's bi-partisan plan, originally called the Commuter Benefits Equity Act, would not only provide hundreds of dollars in savings to commuters, but also encourage more drivers to choose mass transit. The bill brings the mass transit subsidy equal to the $230 set aside for employee parking expenses, increasing the incentive to take mass transit.
Schumer's bi-partisan legislation is co-sponsored by Senators Specter, Carper, Menendez, Kennedy, Dodd, Wyden, Kerry, Boxer, Lieberman, Bingaman, Cardin and Lautenberg.
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