Transit subsidy set to return to $120
Tuesday, October 26, 2010; 6:58 PM
Federal employees and some private-sector workers who take public transit have enjoyed a big break in their commuting costs since early last year, thanks to the stimulus law. The tax-free dollars they could set aside from their paychecks have almost doubled.
But after two years, the expanded commuter benefit is set to expire Dec. 31 unless Congress acts to extend it, an unlikely scenario given a lame-duck session after the midterm elections and partisan gridlock over new spending.
The likely reduction - back to $120 from the $230 benefit in effect since Jan. 1, 2009 - is taking many federal workers by surprise and disappointing transit advocates who say reducing the benefit will put more cars on the road in Washington, New York, Chicago and other congested urban areas. In the Washington area, riders had been insulated from Metro's historic fare increase this year with the higher subsidy.
The U.S. Department of Transportation, which manages transportation benefits for 110 federal agencies, is distributing memos and fliers to notify the agencies of the change. But several federal workers boarding Metro at L'Enfant Plaza after work last Friday said they had no idea their transit subsidy likely would be reduced.
"That's the first I'm hearing it," said Jasmine Leary, 25, an administrative assistant at the Department of Housing and Urban Development, after the HUD shuttle bus dropped her off at the station entrance. Leary shares a townhouse with three friends in Fair Oaks and uses her SmarTrip card to ride the Fairfax Connector bus to Vienna, where she gets on the Orange Line. The commute comes to about $12 a day, and Leary, on a $34,000 salary, said she uses the full $230 subsidy.
"I just think it's completely inconvenient [to cut it back], especially during hard economic times," Leary said. "Metro has raised prices. I'm actually thinking it might be time for me to look for a job closer to home."
The larger subsidy was long sought by transit groups as a way to create equal tax treatment of transit commuters and drivers, who for years had been able to use $230 a month in pre-tax dollars toward parking expenses. Now those groups are lobbying lawmakers on Capitol Hill to extend it. People with relatively expensive commutes - on rail and express bus, for example - have benefited the most from the increase. But at a cost of roughly $192 million for two years, it was not permanent. And continuing it will be a hard sell on Capitol Hill right now, congressional aides say.
"The federal government was incentivizing more driving, and they finally leveled the playing field," said Stewart Schwartz of the Coalition for Smarter Growth, a Washington-area group that advocates for development near public transit. "It would be terrible to lose this."
About 170,000 federal workers and 115,000 employees at private companies in the Washington area use the transit benefit, Metro spokesman Steven Taubenkibel said. He could not say how many of those commuters were prompted to sign up since the higher transit subsidy took effect. A Transportation Department spokesman said that across the country, the increase boosted participation by 3 percent at 110 federal agencies.
The pre-tax commuting dollars can be used for vanpools, trains and suburban buses. Through Metro's SmartBenefits program, federal agencies and participating private employers arrange a pre-tax payroll deduction, sending the money for electronic transfer to SmarTrip fare cards.
"We rely on federal workers to sustain our system," said Jeff McKay, a Fairfax County supervisor who serves on the Metro board. He said he is concerned that if some of these riders decide to drive because the transit subsidy is too low and Metro fares are too high, "We'll lose riders, and that will have a major impact on our system."
The higher benefit would be extended for one year in language tucked into a green-energy tax bill drafted by Democrats on the House Way and Means Committee. But the bill has not been formally introduced, partly because it faces opposition in the Senate. Its cost would be largely offset by repealing tax breaks on the oil and gas industries. Extending the transit subsidy would cost $137 million.
"Some people don't own a car, and we already have our fair share of challenges with air quality and traffic congestion in the Washington, D.C., area," said Rep. Chris Van Hollen (D-Md), who serves on Ways and Means and pushed for the provision. The transportation benefit "should treat commuting by train or bus on par with commuting by car."
Under L'Enfant Plaza on Friday afternoon, Leon Litow said that as much as he appreciates the full $230 a month in pre-tax dollars taken out of his paycheck to pay his commuting costs on Metro and a bus to Burtonsville, he understands political reality, too.
"This is a political year, regardless of the worthiness of the benefit," said Litow, a program analyst for the Department of Health and Human Services. "Everybody's got to tighten their belts, including federal employees."
He anticipates "almost definitely paying something out of pocket" for his commute starting Jan. 1.