Metro commuters face year-end curb in benefits

By Ann Scott Tyson
Washington Post Staff Writer
Monday, November 22, 2010; 8:28 PM

Metro riders could face a double whammy at the end of 2010: a slashing of the commuter transit benefit by almost half, and a new restriction that will bar the sharing of parking and transit funds in SmartBenefits accounts.

Metro officials fear that the changes will discourage riders by making it more costly and cumbersome to use public transit, causing a potential annual loss of 1.3 million to 3.8 million transit trips.

"If people see their benefit is reduced, they may decide to hop back in their cars," Metro spokeswoman Lisa Farbstein said. "It puts more vehicles back on the road and adds to congestion, and it's bad for air quality."

Metro, which is already projecting an operating budget gap for fiscal 2012 of $89 million, estimates that it stands to lose an additional $5 million to $10 million in revenue annually as a result of the projected ridership drop.

An estimated 285,000 workers in the Washington area have received transit benefits of up to $230 a month since March 2009, when they were increased from $120 a month as part of the Obama administration's economic stimulus legislation, the American Recovery and Reinvestment Act, which expires Dec. 31.

Of those, about 170,000 federal employees and 115,000 private employees are registered for the SmartBenefits program, Metro data show.

Metro is lobbying Congress to extend the benefit. Interim General Manager Richard Sarles last week sent a letter to members of local congressional delegations urging them to back legislation that has been introduced in the Senate and the House to stop the change. Metro is also holding meetings with congressional staff.

Transit advocates said the bills would make the increase in the transit benefit permanent, but that a vote on the legislation is unlikely soon. Instead, it is more likely to be attached to other legislation that would allow the benefit to be extended again, according to Daniel M. Neuburger, chief executive of TransitCenter, a New York-based corporation that has administered commuter benefit programs.

The commuter benefit allows employers to provide workers with a tax-free or pre-tax transit benefit. Federal employees are entitled by law to up to $230 a month in public transit subsidies for commuting.

Those impacted most by the benefit reduction would be the estimated 90,000 Metro riders who currently receive more than $120 per month in transit benefits. In the worst-case scenario, riders could lose $1,300 a year in transit benefits, Sarles said.

Metro will launch an advertising campaign next week to inform riders of the changes and their impact, with ads in local newspapers and banners in stations such as Capitol South, Federal Center, and L'Enfant Plaza, where there is a high concentration of commuters who receive the tax benefit or subsidy, Farbstein said.

"We hope that when people see the ads that they will understand there is a limited time for Congress to act," she said.

The banners could produce grassroots lobbying by Capitol Hill workers.

"Of course we would be thrilled if they would notify their members of Congress to have it be extended," she said.

Also, Metro will separate transit and parking benefits early next year in accordance with an Internal Revenue Service reading of the law.

Metro last week sent an e-mail to 6,000 employer contacts to advise them of the change, Farbstein said.

Metro was supposed to make that change last January but requested to delay it for a year. Metro Board of Directors Chairman Peter Benjamin said last week that Metro has not requested another extension.

Under the plan that was to be put in place last January, the customer's card would "pull" payments from either the transit purse or parking purse automatically as riders used faregates, bus fareboxes or card readers at parking lots.

But at the end of each month, any unused benefits in the new electronic purses would be credited back to employers, officials said last year, which caused an uproar among riders.

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