“Transit Tax Hike” Is All But Guaranteed Next Year

Virtually all LIRR riders who receive federal transit commuter benefits will be hit with a "transit tax hike" next year. (Click to view larger.)

While some in Congress indulge in end-of-year partisanship, it’s transit riders who will be hit by the hangover come January 1. Transportation For America reports that the transit commuter tax benefit is essentially guaranteed to drop next year, from $230/month to $125/month, while the equivalent benefit for parking will rise to $240/month. This means the federal tax code will incentivize driving over public transportation.

The benefit rollback would cost commuters hundreds of dollars a year. According to a white paper produced by a coalition of benefit providers, someone who makes $50,000 a year and spends at least $230/month on transit will be hit with a “transit tax” of more than $400/year.

The majority of commuter rail monthly passes on NJ Transit, Metro-North, and the LIRR cost more than $125. (As shown above, it costs LIRR riders more than $125 for a monthly pass between any station in the system and New York City—including for trips within NYC). So do most monthly fares for the private and NJ Transit-operated commuter buses that travel into the Port Authority Bus Terminal. In New York City, express bus commuters typically pay at least $200/month (7-day Express Bus MetroCards are $50 each). Also affected would be commuters who ride more than one transit system, such as a person who pays $104 for a monthly MetroCard and $65 for monthly PATH fare.

According to TransitCenter, 15,000 companies in New York City offer the commuter tax transit benefit, and over a half-million employees make use of it.

The six senators from our region—Senators Schumer, Gillibrand, Lautenberg, Menendez, Lieberman, and Blumenthal—have sponsored legislation to permanently increase the transit benefit (S1034/HR2412), and were among a group of 22 senators that had worked to include an extension of benefit parity in the payroll tax extension bill. This ultimately did not happen; efforts to restore the benefit will continue when Congress resumes work next month.

3 Comments on "“Transit Tax Hike” Is All But Guaranteed Next Year"

  1. To hell with the LIRR! I use the Express Bus (the only real option to Midtown), and at $11.00 a day with ~20 work days per month, $125 only covers half the month.

  2. Rail Advocate | December 23, 2011 at 9:25 pm |

    A better approach for the transit community would be to support a reduction in the parking benefit to $125 a month to maintain a balanced commuting field. In this era of huge federal deficits the transit community, like everyone else, is going to have to give up a few federal goodies.

    I wonder if abolishing the federal parking and commuting benefits would come close to filling the $12 billion gap in the two year extension of the surface transportation funding bill? Probably not.

    In most places around the country, other than some commuter rail systems, $125 covers a month worth of transit fares.

  3. @Spazztastic : Let me guess. You live in Staten Island, right?

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