SCHUMER: NEW TAX BREAK COULD SAVE EACH SUBWAY, BUS, EXPRESS BUS, LIRR, AND METRONORTH RIDER MORE THAN $1,000 PER YEAR - WOULD SIGNIFICANTLY MITIGATE OF EFFECT OF NEW FARE HIKES
Less than 1 in 5 NYC Riders Now Take Advantage of the Benefit - Easy for Companies to Sign Up, Helps Both Commuter and BusinessesSchumer to Commuters: Tell Your Employer to Sign Up for the TransitBenefit ASAP - Saves You Money, Saves the Company Money, Boosts Ridership to Keep System RunningFederal Mass Transit Benefit Now Covers $230 Per Month Worth Commuting Costs -
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On the heels of the MTA approving staggering fare hikes for all subway, bus, express bus, LIRR and MetroNorth riders, U.S. Senator Charles E. Schumer today said that thanks to an expanded federal mass transit tax break, the entire cost of those fare hikes to riders could be fully recouped. Schumer authored legislation, passed as part of the economic stimulus package that nearly doubled the federal tax break for mass transit costs from $120 per month to $230 per month. Riders receive the benefit through their employers; however, right now, less than oneinfive New York City area commuters actually benefit from the tax break because their employers do not offer the benefit. Schumer said that the expanded tax free benefit will particularly help express bus riders in the outer boroughs, as well as LIRR and MetroNorth because the increase in the benefit will ensure that the entire monthly cost of commuting remains fully covered. Schumer issued a call today for all commuters to ask their employers to sign up for the program saying that, with a monthly unlimited Metrocard possibly rising to $103 per month, the benefit could save their employees more than $1,000 per year. Schumer added that because the employer can offer the benefit without paying payroll taxes on the cost, it ends up saving the business as well.
"If these fare hikes go through, we need to do everything we can to help New Yorkers foot the bill. Every New Yorker needs to know that there is help out there that, and while all signs point to costs going up, there is an easy way to bring those commuting costs right back down. The mass transit benefit is a win for commuters because it can slash the cost of getting to work, it's a win for businesses who enjoy a significant tax break to cover the cost of the benefit, and it's even a win for the MTA because it will help boost ridership. This is a no brainer but we need to get the word out."
The commuter benefit covers up to $230 per month from a person's gross income to pay for their mass transit commutes. Employees whose monthly mass transit fees are less than the $230 cap are allowed to deduct the full amount from their paychecks. The measure helps employers save money by lowering their payroll taxes.
Schumer authored legislation, passed as part of the economic stimulus package, allowing employers to offer their employees up to $230 per month in transit benefits tax free, equal to what they can offer taxfree for parking costs. While the transit benefit typically reduces a commuter's transportation costs by a third or more, the old disparity between the two benefits significant disparity between the two benefits creates an inefficient incentive for people to drive to work rather than take mass transit.
Schumer said the $230 per month benefit will fully cover the monthly cost of riding all major mass transit systems in the city - subway, bus, express bus, LIRR and MetroNorth - even with the looming fare hikes.
Schumer said that the New Yorkers who would most benefit from the new increase in the transit benefit are people who commute from the outer boroughs, Long Island and Westchester. Under the old cap of $120 per month, only a small portion of the total monthly cost of commuting on the ExpressBus, LIRR and MetroNorth was fully covered. And now, with the looming fare hikes, the disparity between what was covered and the actual cost of riding would have been far greater.
With the increase to $230 per month passed in the stimulus package, Schumer said that now, even with the fare hikes, the full monthly cost of commuting would be covered. Below is how commuters on each service would be covered.
· NYC Bus and Subway - The mass transit benefit would cover the full $103 per month cost of an Unlimited 30day MetroCard.
· Express Bus - The increased mass transit benefit would now fully cover the monthly cost of buying a weekly pass on MTA express bus which would cost $51 under the fare hikes. Under the old benefit, only 58 percent of the cost was covered.
· LIRR - The increased mass transit benefit would now nearly fully cover the typical monthly pass from the most common commuting areas. For example, a monthly ticket from Garden City to Penn Station, which would now cost $235 under the fare hikes would only have been 50 percent covered by the old mass transit benefit. Now nearly all of it would be covered, saving them more than $1,000 per month.
· MetroNorth - The increased mass transit benefit would also now nearly fully cover the typical monthly pass for most MetroNorth riders.
However, Schumer said that the vast benefits of the mass transit tax break can only have their full effect if employers offer the benefit and employees know to take advantage of it.
According to a survey by The Transit Center, a leading advocate for increasing the transit benefit and creator of the nation's first transit voucher, only 24% of MetroNorth and 18% of NYC Transit's daily riders take advantage of commuter benefit programs.
Schumer today called on all New Yorkers to visit www.transitcenter.com to learn how to sign up.
Besides providing relief to commuters who already use the benefit, the increased benefit will increase the number of employees offered the benefit as a result of the increase in employee and employer savings under the new law. Recent TransitCenter surveys indicate that as many as onethird of employers not currently offering the benefit would do so if the monthly transit benefit were increased significantly, as it now has been. Further, 53 percent of employees would take advantage of the benefit if offered to them.
In the New York metro area alone, commuters typically save well over $150 million a year because of the transit benefit. Employers have saved significantly as well, over $35 million since the benefit went into effect in the New York area. Approximately 15,000 companies in New York offer the transit benefit covering about 650,000 employees.
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