With Metrorail ridership continuing to decline, the chairman of the transit authority’s board of directors on Wednesday amplified the agency’s long-standing assertion that “inequitable” federal tax rules are largely to blame for the problem.
Appearing with two U.S. House members and a group of mass-transit advocates at a news event on Capitol Hill, board chairman Tom Downs called on Congress to increase the amount of money workers can have deducted from their monthly incomes, before taxes, to pay for transit fares.
The maximum pre-tax deduction, known as the federal transit benefit, had been $245 a month. At the start of 2014, however, it was reduced to $130 a month while the maximum monthly pre-tax deduction for parking rose to $250. The disparity has led thousands of former subway riders to start driving to work, according to Metro.
A bill in the lame-duck Congress would set the transit and parking benefits at $235 each.
“I want to say, on behalf of the transit industry, we are not interested in a benefit that makes us more than competitive with the highway users,” Downs said in urging passage of the legislation. “We are simply interested in equity so we can compete on a level field.”
Downs was joined by U.S. Reps. Earl Blumenauer (D-Ore.) and Jim McGovern (D-Mass.). “People who drive are better off if more people are using” mass transit, Blumenauer said. “That’s fewer people ahead of them on the road, fewer people who are competing for parking, fewer people polluting the air.”
McGovern said of the bill, “If there ever was a no-brainer, this is it.”
In 2013, a temporary tax provision called an “extender” set the transit benefit at $245, which was then equal to the parking benefit. Amid debate over tax reform, however, Congress didn’t renew the provision. Although the parking benefit rose to $250, the transit benefit dropped to $130.
This month, in a detailed memo to the Metro board, the agency’s planning staff said workday rail ridership has gone down by more than 1 percent since May 2013, an average decline of about 9,000 passenger trips each weekday.
There are several reasons for the decline, including telecommuting and reductions in the federal workforce. But the bulk of those lost customers are people who had been using the transit benefit, Metro’s planning staff said.
Most were riders with long commutes — from outlying suburban stations to stations in downtown Washington — and were paying maximum fares, Metro said.
In an interview, Metro spokesman Dan Stessel used the example of a passenger traveling to and from work five days a week between the Shady Grove and Metro Center stations during rush hours, trips that cost $5.90 each way, the rail system’s highest fare.
Under the former $245 transit benefit, the rider’s annual out-of-pocket expense would be $1,982. With the $130 benefit, the yearly expense is $2,364, an increase of 19 percent.
“That’s the reason we see those primarily long-distance riders dropping off,” Stessel said.
In a budget forecast for the next fiscal year, beginning in July 2015, Metro recently said that stagnant ridership, partly caused by the lower transit benefit, probably will mean reduced fare revenue for the agency. That would force Metro to seek increased financial subsidies from the local jurisdictions it serves, budget planners said.
“We think that there is an agreement among businesses, the public sector, and both the highway community and the transit community that this is an equitable change,” Downs said Wednesday, referring to a proposal to set the same amount, $235, for the transit and parking benefits. He said “that needs to be a permanent part” of federal tax rules.