Bus Shelter

In a misguided policy, tax incentives for transit riders expired at the end of last year

You probably heard some version of the old New Year’s Eve joke. It goes something like this: “I’m so proud of my friend Larry. He was out partying on New Year’s and had too much to drink so he decided to take the bus home. I was really proud of him, especially since it was his first time driving a bus.”

I can only hope that you heard better jokes over the holidays. But the scary part about this joke is that, in at least one respect, it seems that crazy drunk Larry really is driving our country’s approach to commuting and mass transit. 

Here’s the deal: If you commute to work via mass transit, Congress just raised your taxes as of Jan. 1. If you drive to work, they left you alone. 

Whether you drive, bus, bike, walk or crawl to work, or if you don’t go to work at all, you might want to know that your government just took another step toward promoting private automobile use at the expense of mass transit and the environment. It was a giant step backward.

How did that happen? Just before Christmas, Congress passed and the president signed the bill extending unemployment benefits and the lower payroll tax for wage earners. It was a bill that our local representative, Ann Marie Buerkle, (R-Onondaga Hill), voted against, saying that she didn’t have enough time to read it.

A provision to extend tax benefits for commuters did not make it into that final version of the bill. Here’s how those tax benefits worked. The stimulus bill passed in 2009, known as the American Recovery and Reinvestment Act, nearly doubled the amount of pre-tax income mass transit users could set aside for their commute. Until 2009, drivers could receive as much as $230 per month in untaxed income to pay the cost of driving and parking their car, but someone riding a bus or a train could only deduct $120. For the past couple of years there was a level playing field, so to speak, much to the benefit of people in large urban areas. 

Bike riders can claim $20 each month, but only if their employer offers such a benefit. Snowshoers, dog sledders and horseback riders are out of luck.

The Transit Center, a New York City-based think tank that promotes mass transit use, noted last year that in the first two years of the increased tax credit, 29 percent of employers reported higher enrollment in commuter benefits programs. The increased credit also had a benefit for employers, who did not have to pay payroll tax (usually 6.75 percent of wages) on that extra $110 per employee each month. 

This was what they like to call a win-win-win (or as many wins as you like). It’s better for the environment, a boost to the economy, an incentive to hire more workers and even better for drivers, who might find roads less congested and parking easier to find. All accomplished without any government coercion mandates. What’s not to love?

But since the expiration of the provision, warming a bus seat or hanging from a subway strap just got more expensive, and American tax policy once again reflects the insane American belief that the car is king. Larry is once again in the driver’s seat.

Most automobile drivers in our area, and I am no exception, do not have a convenient mass transit option. It is not productive to engage in an individual blame game. What we need is sane policy that structures incentives in a way that promotes less pollution, less petroleum consumption, less congestion on our streets and highways.

We should take every small step we can toward a sane energy economy. This is one of them. Or we can just have Larry drive us home.                                                     

Ed Griffin-Nolan is senior writer at the Syracuse New Times. Contact him at edgriffin@twcny.rr.com.