Commuter Choice
(Public Transportation Benefits)
Most Americans spend more on driving than on health care, education, or food. In fact, a recent study found that the average family devotes nearly 20% of its annual income to getting around, second only to housing. And of course, working families spend the most – sometimes more than one-third of their income goes to transportation.
The vast majority of that spending, 98%, is for the purchase, operation, and maintenance of automobiles. But in areas where public transportation use is prevalent, the percentage of household dollars dedicated towards transportation costs is significantly less.
Federal law now allows employers to give their workers up to $105 per month to cover public transportation commuting costs as a tax-free benefit. Alternatively, employers can allow employees to pay for transit commuter benefits with payroll deductions, or they can share these costs with employees by paying part of the commuter benefit and allowing employees to pay the remainder using pre-tax dollars. Under this unique program, everyone wins. Employees do not pay federal income tax on transit commuter benefits, and employers can deduct their costs for providing such benefits, and avoid payroll taxes on such benefits, regardless of who pays.
ATU Supports
1) Legislation requiring state employees to be offered a qualified public transit benefit equal to their commuting costs, not to exceed the federal limit of $105 per month, in the form of pre-tax revenue or passes purchased by state agencies with appropriated funds; and
2) State tax incentives for companies whose employees use mass transit, allowing for a certain credit against the state income tax (and/or other business taxes) for certain costs incurred by employers that provide commuter benefits to employees.
3) Getting People from Welfare to Work
More working families should be able to take advantage of this unique fringe benefit, which provides a real financial incentive to both employers and employees to get people to travel to work by transit, arriving safe, rested, on-time, and with the ability to be far more productive. However, not enough people are benefitting from this worthwhile program.
JARC
Approximately 94% of welfare recipients attempting to move into the workforce do not own cars and must rely on public transportation to get to work. And, while 60% of welfare recipients live in central cities, the majority of new jobs are in the suburbs. The federal Job Access and Reverse Commute Program (JARC) has been a huge success in providing targeted transit services to dislocated workers, welfare recipients, and other low-income individuals seeking affordable access to jobs in suburban areas.
From 1998-2005, these innovative programs were available only in a limited number of states. However, the new federal transportation bill expands JARC by providing seed money to transit systems in all 50 states.
Now, it is up to the states to provide matching funds so that transit operators nationwide may work to meet the needs of low-income people by providing special reverse commute and suburb-to-suburb bus, rail and van services to match center city residents with suburban jobs.
The program will only reach its full potential with significant investment by the states.
