11.11.14

SCHUMER LEADS RALLY TO REINSTATE EXPIRED “MASS TRANSIT TAX BENEFIT” THAT SAVES METRO-NORTH COMMUTERS OVER $1K PER YEAR — SENATOR JOINS WITH LOCAL COMMUTERS & ADVOCATES TO MAKE IT CLEAR THAT PASSAGE OF IMPORTANT BENEFIT DURING LAME DUCK MUST BE A PRIORITY

Approximately 170,000 Westchester, Rockland & Putnam Commuters Who Take Metro-North Each Day Used To Be Eligible to Receive Up to $245 in Pre-Tax Savings On Metro-North Commute Every Month, But Provision Expired Last Year, Dropping Monthly Savings to $130 – Schumer Launches Push for Action on ‘EXPIRE Act’ During Lame Duck to Reinstate Higher Rate

Schumer Said Commuter Benefit Would Go Into Effect For 2015 & Cover 2014 Costs Retroactively – Benefit Needs To Be Passed By Jan 1st, Otherwise Local Residents Could Be Stuck With Lower Savings For Entire Year


Schumer: Commuters Who Take Metro-North To Work Should Get Same Benefit As Those Who Drive

Today, at the White Plains Train Station, U.S. Senator Charles E. Schumer brought together local commuters and transportation advocates for a rally to urge Congress to reinstate the expired “mass transit tax benefit” that saves Metro-North riders over $1,000 per year. Schumer said that the provision, which previously provided $245 per month in pre-tax savings to pay for their mass transit commutes, expired at the end of 2013, dropping the pre-tax savings to only $130 in 2014. Schumer noted that, when Congress is back during the lame duck session, it will be considering a package of tax provisions including this “mass transit” benefit, and he will say that reinstating this tax credit, which would now cover up to $250 per month for commuters, should be a priority. Schumer said that an average of 170,000 customers use the Metro North commuter railroad each weekday; Schumer said that these customers would be eligible for the tax benefit. Schumer explained that this tax benefit would be put in place for next year and also cover 2014 costs retroactively. Schumer, who was the original author of the legislation that created this tax break, said that this benefit must be extended to put tax savings back into the pockets of commuters in Westchester, Putnam and Rockland counties who ride Metro North each day.

“As the price of commuting continues to climb, this tax break has become increasingly vital. Mass transit is the lifeblood of Westchester and the greater New York City area, and this provision helps keep it flowing and affordable,” said Schumer. “It makes absolutely no sense to provide those who drive to work with a massive tax break and make commuters who use mass transit pay more. It’s an unwise and unfair disparity in the tax code, and I intend to fix this inequity.”

Specifically, Schumer pointed to four examples of savings for Metro North commuters. Right now, the cheapest MTA monthly ticket in lower Westchester costs $222; without an extension of the benefit, a commuter traveling from a station as close as the Yonkers station, for example, will be required to pay $92 in post-tax dollars a month, costing the commuter $1,104 a year. The most expensive MTA monthly ticket costs $500; without an extension of the benefit, a commuter traveling as far as the Wassaic station in Dutchess County will be required to pay $370 in post-tax dollars a month, costing the commuter $4,440 a year. Comparatively, a monthly ticket for a station in upper Westchester, like Peekskill, costs $343; without an extension of the benefit, a commuter traveling from Peekskill will be required to pay $213 in post-tax dollars a month, costing the commuter $2,556 a year. Finally, a monthly ticket from the White Plains station costs $249; without an extension of the benefit, a commuter traveling from the station will be required to pay $119 in post-tax dollars a month, costing the commuter $1,428 a year.

Schumer was the initial author of the legislation that created this tax break, and it was first passed as part of the stimulus package. This benefit has saved mass transit riders over $1,000 per year. Schumer said the original benefit covered up to $245 per month from a person’s gross income to pay for their mass transit commutes and provided parity with a previous benefit extended to drivers’ parking costs. In 2013 alone, approximately 700,000 New York area commuters saved over $330 million through this benefit.  However, Schumer said, despite his attempts, Congress failed to extend this benefit in 2014 after it expired in 2013. That is why, Schumer explained, he is pushing to put this tax benefit in place for 2015 and to have it cover 2014 costs retroactively. 

Schumer said that it needs to be extended before January 1st, during the Lame Duck session of Congress, or mass transit commuters will be stuck with lower savings. Schumer successfully included a provision to reinstate and extend the benefit through 2015 in a package of expired tax provisions called the EXPIRE Act. This act received bipartisan approval in the Senate Finance Committee. Nearly every year Congress passes this type of bipartisan package extending tax provisions that are scheduled to expire or have already expired. However, it has failed to do so since 2013.  Schumer is pushing for this legislation to be passed in the next six weeks. There has been some opposition in Washington to doing such a package, but today Schumer said that Westchester commuters absolutely cannot wait. He said the EXPIRE Act, including the transit benefit, must be passed this year.

Previously, employees whose monthly mass transit fees were $245 or less could deduct the full amount of their commuting costs from their paychecks, tax free, through an employer benefit program. The cost was pegged to the IRS tax benefit that covered parking for drivers. Until 2009, commuters who drove to work received a greater tax break than those who took mass transit. According to the IRS, the parking benefit was scheduled to increase to $250 in 2014.

Schumer also said that it makes no sense for Congress to continue debating the reinstatement of this benefit each year, and he noted that he has a bill, the Commuter Equity Benefits Act, which would permanently provide parity between the commuter benefit and the parking benefit, so that Congress can never again fail to extend the mass transit benefit. Schumer said he will push to pass this commonsense solution in the next Congress.

In 2009, the mass transit benefit was almost doubled, jumping from $120 per month to $230 per month and creating a savings of over $1000 per year for commuters. In 2013, 700,000 commuters in the Greater New York Metropolitan Area, and 2.7 million commuters nationwide took advantage of the benefit. However, the benefit expired on December 31, 2013 and Congress failed to extend it in 2014. Schumer authored legislation that passed as part of the economic stimulus package in 2008, allowing employers to offer their employees up to $230 per month in transit benefits tax free, equal to what they were offering tax-free for parking costs. The transit benefit can reduce a commuter’s transportation costs by a third or more. If the benefit is not reinstated and extended into 2015, this would create a greater incentive for people to drive to work rather than take mass transit, as the $250 pre-tax savings would only apply to those who drive, while the transit benefit would be $130. Schumer said that the more people who commute via mass transit, the better it is for the environment and for keeping traffic down for those who do commute by car.

Schumer was joined by a number of transportation advocates and riders. In addition, he was joined by NYS Assemblyman David Buchwald; Thomas Roach, Mayor for the City of White Plains; Veronica Vanterpool, Executive Director for the Tri-State Transportation Campaign; Liz Shollenberger, Chair of the White Plains Democratic Committee; and White Plains Council Members Milagros Lecuona, Nadine Hunt-Robinson, John Kirkpatrick.

“I'd like to thank Senator Schumer for his advocacy on this issue. Thousands of White Plains residents use the Metro-North system every day. The expiration of the Mass Transit Tax Benefit at the end of 2013 has had a direct impact on these commuters,” said Tom Roach, Mayor of White Plains. “Its full reinstatement will help them and our local economy. Our thanks to Senator Schumer for leading the charge.”

“The commuter tax benefit is a smart way to create jobs, encourage mass transit use, and lower the cost of living for suburban families struggling to make ends meet. Bringing the transit tax benefit in line with the tax benefit for drivers will provide much needed relief to Metro-North riders and the businesses that employ them,” said New York State Assemblyman David Buchwald (D-Westchester). “As former Chairman of the Metro-North Railroad Commuter Council, I have fought alongside Senator Schumer for years to make this vital extension a reality, and I applaud him for building a bipartisan coalition in the Senate that supports its passage.”

“NYPIRG greatly appreciates Senator Schumer dogged determination in fighting for parity in tax-freee benefits among motorists and transit riders,” said Gene Russianonff, senior attorney for the NYPIRG Straphangers Campaign, a subway and bus riders group.

During his visit to Westchester, Schumer said that the mass transit benefit covered a large portion of the typical monthly pass from Metro North commuting areas. For example:

The $222 cost of a monthly ticket from Yonkers to Grand Central Station was fully covered by the benefit, but only 58% of the monthly cost would be covered if the benefit is not extended. Without an extension of the benefit, a commuter from Yonkers will be required to pay $92 in post-tax dollars a month, costing the commuter $1,104 a year.

The $249 cost of a monthly ticket from White Plains to Grand Central Station was also fully covered by the benefit, but only 52% of the monthly cost would be covered if the benefit is not extended. Without an extension of the benefit, a commuter from White Plains will be required to pay $119 in post-tax dollars a month, costing the commuter $1,428 a year.

The $343 cost of a monthly ticket from Peekskill to Grand Central Station was 72% covered by the benefit, but only 37% of the monthly cost would be covered if the benefit is not extended. Without an extension of the benefit, a commuter from Peekskill will be required to pay $213 in post-tax dollars a month, costing the commuter $2,556 a year.

The $500 cost of a monthly ticket from Wassaic to Grand Central Station was 50% covered by the benefit, but only 26% of the monthly cost would be covered if the benefit is not extended. Without an extension of the benefit, a commuter from Wassaic will be required to pay $370 in post-tax dollars a month, costing the commuter $4,440 a year.

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