Mass Transit Incentive to be Cut While Parking Incentive Stays the Same

Obscured in the debate over whether to extend the payroll tax cut is the possible loss of an incentive to take mass transit. If Congress takes no action (and it appears it won't), the tax-free fringe benefit for taking mass transit will be cut in half, while the benefit for driving to work stays the same. That sends a bad message.

Currently, your employer can give you up to $230/month pre-tax to cover your mass transit costs, the same as they can give you to pay to park your car. The transit benefit is set to go back down to $120 on January 1. That's where it was before the stimulus bill increased it to its current level. Granted, a monthly subway pass in many cities is less than $120 ($95 in Atlanta, $104 in New York City), but the monthly expense for commuter trains like the Long Island Railroad can run hundreds of dollars. The bottom line is cutting a benefit for commuting while leaving the parking benefit the same sends exactly the wrong message when policies should be encouraging people to leave their cars at or near their home.

President Obama vows new focus on transit

On this historic day, a reminder of President Obama's stated positions on energy efficient public transportation.
http://www.barackobama.com/pdf/issues/FactSheetTransportation.pdf

Create Greater Incentives for Public Transit Usage: The federal tax code rewards driving to work by allowing employers to provide parking benefits of $205 per month tax free to their employees. The tax code provides employers with commuting benefits for transit, carpooling or vanpooling capped at $105 per month. This gives drivers a nearly 2:1 advantage over transit users. Obama and Biden will reform the tax code to make benefits for driving and public transit or ridesharing equal.
Strengthen Metropolitan Planning to Cut Down Traffic Congestion: Our communities will better serve all of their residents if we are able to leave our cars, to walk, bicycle and have access other transportation alternatives. As president, Barack Obama will re-evaluate the transportation funding process to ensure that smart growth considerations are taken into account. Obama will build upon his efforts in the Senate to ensure that more Metropolitan Planning Organizations create policies to incentivize greater bicycle and pedestrian usage of roads and sidewalks. As president, Obama will work to provide states and local governments with the resources they need to address sprawl and create more livable communities.
Require States to Plan for Energy Conservation: Obama and Biden will also reform current law which simply asks governors and their state Departments of Transportation to “consider” energy conservation as a condition of receiving federal transportation dollars. As president, Obama will require governors and local
leaders in our metropolitan areas to make “energy conservation” a required part of their planning for the expenditure of federal transportation funds.

I look forward to exploring each of these in the months to come.