Congress Lets Mass Transit Tax Benefit Expire

Due
to inaction by Congress before leaving for the holidays, the
amount of tax-exempt money that mass transit commuters can apply toward transportation costs will be cut in half to approximately $125 per month.
As a result, the tax-exemption for parking costs, at $240, will now be nearly
double the mass transit commuter benefit.

The
federal pre-tax mass transit
benefit,
which is provided by employers, allows people to save money on their daily
commute, saves businesses critical dollars that can be reinvested to create new
jobs, helps reduce traffic congestion and improve air quality, and saves
energy.

Civil
and human rights advocates see the reduction in this benefit as a real loss for
those individuals who rely most heavily on
public transportation: people with disabilities, students, seniors, and
low-income people.

Transportation
is the second largest household expense for most working families. Low-income
individuals spend about 42 percent of their total annual incomes on
transportation, compared to 22 percent of middle-income individuals. And racial
minorities are four times more likely than Whites to rely on public
transportation for their work commute.

 Programs and benefits that lower
transportation costs make a difference for working families struggling to make
ends meet. More than 2.7
million working families, at all income levels, now take advantage of the
transit portion of the commuter benefit.

The
mass transit commuter benefit helps encourage public transit ridership, while
enabling people to commute to work in a manner that is affordable. The steep reduction in the transit provision is due to
Congress’s failure to renew the limit at previous levels in the Commuter
Benefits Equity Act. Congress may
approve a higher limit for transit benefits when it returns in January 2012.