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Equity of Metro fare increases questioned

By Ann Scott Tyson
Washington Post Staff Writer
Monday, August 9, 2010; B01

Metro's historic fare increase is hitting some riders far harder than others -- with some paying entirely out of their own pockets while a large percentage, including 170,000 federal employees, enjoys a commuter benefit of up to $230 a month that offsets the cost.

That disparity has generated complaints of unfairness from some commuters, but it could shrink by the end of this year, when the size of the federal commuter benefit will fall by almost half -- to $120 a month -- unless Congress passes legislation to extend it.

"It's ridiculous," Anthony Cuff, 26, a FedEx employee, said of the fare increase as he boarded a Red Line train Thursday. "The fare increase is making it very difficult for me to maintain my budget," said Cuff, who does not receive any benefit for his daily commute from Bowie.

"Somebody is paying for the fare increase -- it's our tax dollars at work," Jan Augustine, a retired international management consultant from Chevy Chase who does not receive any transit benefit, said of federal workers' shares.

Many federal workers are not feeling the pinch. The fare increase is of "no concern to me," said Wayne Smith of Chevy Chase, who works at the Smithsonian Institution as a project manager. The transit benefit amply covers "whatever it takes" to go to and from his job downtown, Smith said Friday at Friendship Heights Station.

The debate over the fare increase and commuter benefits raises questions about the shifting incentives for commuters to either drive or take public transit.

Metro's leadership decided to impose the $109 million, across-the-board increase to fill the bulk of the $189 million operating budget deficit for the fiscal year that began July 1. Rail fares have gone up about 18 percent and bus fares 20 percent overall.

Who bears the brunt?

Public comment solicited by Metro before the increase suggested that many riders preferred to pay more in fares rather than face service cutbacks. But as Metro data show, a significant percentage of Metro riders weren't bearing the brunt of the fare increase.

According to Metro, more than 120,000 federal employees ride Metro to work daily, and federal workers make up 40 percent of peak ridership.

"The preference for fare increases opposed to service cuts is driven by people who don't have to take cash out of their pocket," said Mortimer Downey, a federally appointed member of the Metro board of directors.

Jim Graham, board member from the District, said it was unique to the nation's capital that a transit system's fares would be raised and yet not felt by so many riders. "You have during the peak hour a substantial number of people who can pass the fare increase to another place," he said. "They don't experience the same increase that other riders do."

Federal employees are entitled by law to up to $230 a month in public transit subsidies for getting to and from work. With the fare increase, federal employees will be claiming more of that benefit, indirectly increasing federal funding for Metro's operating budget, as opposed to its capital needs.

The commuter benefit, which allows employers to provide workers with a tax-free or pre-tax transit benefit, was increased from $120 to $230 a month in March 2009 as part of the Obama administration's economic stimulus legislation, the American Recovery and Reinvestment Act.

About 170,000 federal employees and 115,000 private employees are registered for the SmartBenefits program, Metro data show. A Metro passenger survey from 2008 showed that 42 percent of Metrorail riders and 24 percent of Metrobus riders use SmartBenefits, with some employers paying for benefits outright and others deducting from payroll pre-tax.

Opposing benefit cut

That benefit will revert to $120 a month Dec. 31 unless Congress acts to extend it, reducing the maximum tax-free benefit available to all employers and reimbursement offered to federal workers.

Metro and transit advocacy groups are lobbying to have the higher benefit continued out of concern that cutting it could push some commuters back onto the roads. A study in the Journal of Public Transportation this year found that transit benefits have succeeded in mitigating traffic over the past 30 years.

One reason Congress adopted the higher public transit benefit was to attain parity, for the first time since transit benefits were codified in 1984, with tax-free parking benefits provided by employers.

"If there is less of an incentive, perhaps people will be more inclined to say, 'I won't take the train; I will go back to driving my car,' " said Rob Healy, vice president of government relations for the American Public Transportation Association.

Draft legislation in the House has been put forward that would extend the higher transit benefit for one year, Healy said.

"Commuters who choose to use transit should not be penalized with a smaller transportation benefit than those who drive," said Metro spokeswoman Lisa Farbstein. "If there is a greater benefit for parking costs than for transit costs, people have an incentive to drive rather than to use public transportation, thereby adding to the region's road congestion and greenhouse gas emissions."

To address the gap between subsidized and non-subsidized commuters, more private employers should provide transit benefits, said Metro board member Jeff McKay of Fairfax. The inequity "concerns me to a certain extent," McKay said.

"I wish more private employers would offer benefits to their employees to use transit . . . to make the commute easier for their employees," he said. But he said the Metro board "can't set a fare structure based on how generous a certain employer is."

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