Your Mass Transit Benefits Could Soon Double

Susan Walsh/AP file photo

A Senate committee on Thursday voted to fully restore mass transit benefits for two years, after they were cut almost in half on Jan. 1.

The benefit for federal employees using public transportation fell from $245 to $130 in 2014 after a provision in the American Taxpayer Relief Act – also known as the fiscal cliff deal – expired. The parking benefit actually increased by $5 to $250 for 2014.

Employees first received a significant boost in mass transit benefits in March 2009, as part of what is colloquially known as the economic stimulus package. That act raised the benefit from $115 to $230 per month. Not all employees have been eligible for the heightened benefit; each agency is free to set its own maximum up to the federal limit. Individual employees can only receive -- and write off for tax purposes -- a subsidy in the amount they spend on transportation each month.

The change will affect all commuters whose employers offer transit benefits, not just federal employees. Workforce advocates -- both federal and those in the private-sector -- have spoken out against giving greater incentives to drive than to take mass transportation.

Sen. Chuck Schumer, D-N.Y., attempted to bring parity to the mass transit benefit at the end of 2013, but Senate Finance Committee Ranking Member Orrin Hatch, R-Utah, objected to rushing the provision through Congress.  

“The mass transit commuter benefit provides much needed relief in the form of reduced commuting costs for many working people, including tens of thousands of federal employees who rely on public transportation to get to and from work,” said Colleen M. Kelley, president of the National Treasury Employees Union, in a letter Tuesday to the Finance Committee. She added the incentive to use public transportation decongests roads and reduces pollution.

The committee on Thursday approved a retroactive fix to bump the benefit to $250, dating the boost back to the beginning of the year. Such an approach, which Schumer said last year was “harder but not impossible,” is not without precedent. A similar gap between mass transit and parking benefits also existed in 2012, though the disparity was eliminated retroactively by the fiscal cliff deal.

The panel also approved Thursday a Schumer-sponsored amendment to allow employers to provide tax-free benefits to employees to purchase bike share memberships.

The committee backed the fix as part of a much larger package to extend various tax credits. Senators from both parties said Congress must stop moving from one temporary extension to the next and instead pass a permanent and comprehensive tax code reform bill.  

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