The Commuter Benefit Chase

By Kellie Lunney

March 28, 2013

The sequester is squeezing nearly every agency’s budget. Managers are scouring the books to find all available savings, and that could include less generous public transit and parking benefits for federal employees. The Labor Department, for instance, has already decided to provide a maximum monthly transit subsidy of $125 to employees in 2013 -- $120 less than the maximum that agencies can give feds this year under the law. Agencies would like to avoid massive furloughs, so perks like commuting subsidies are very much on the table. Transit benefits, after all, aren’t entitlements.

The Commuter Benefit Chase 

There’s a rumor out there, beyond the Beltway, that all Washington-area federal employees get free parking.

It’s not true, of course. Some work at agencies that provide free or subsidized parking to eligible employees—for example, the Pentagon and the Federal Deposit Insurance Corporation—but many others ride public transportation to and from their jobs out of necessity, just like workers in other parts of the country. A 2000 executive order directed federal agencies to create a transportation fringe benefit program for employees to ease traffic congestion and encourage the use of mass transit and carpooling. Thirteen years later, it’s proved popular across the country, particularly in congested urban areas and during a time gas prices have skyrocketed.

But popular doesn’t mean it’s perfect or well understood. The benefit also has proved frustrating for some commuters. Uncle Sam doesn’t dole out transit benefits equally: Agencies (and private employers) can provide up to $245 per month in transit benefits, which include subsidies for public transportation and parking, but not everyone receives the maximum amount, or even a full menu of options. Employees are eligible to receive a tax-free transit subsidy that is equal to, but must not exceed, the amount they spend on their commute; if they don’t use the full amount in any given month, the surplus flows back to the government. And an individual cannot receive both a transit and parking subsidy. 

Government Executive asked readers whether they receive a transit subsidy and how they use it. We received more than 100 email responses from feds at various agencies inside and outside the Beltway; in most cases, readers allowed us to use their comments but did not want to be identified.  

A Social Security Administration employee in New York state, for example, receives $75 per month via a Visa debit card to take mass transit to work, while a State Department employee in Washington gets $125 each month automatically loaded onto a SmarTrip farecard to use on the Metro system. Another employee who works at a Transportation Department agency in Cambridge, Mass., reports that there is free onsite parking for commuters “whether single occupancy or car/van pools” and a $2 per day reimbursement from the agency to commuters who use a parking lot to connect to mass transit or vanpools.

Just as feds use a variety of transportation modes to get to work—including car, rail, vanpool, ferry and bus—agencies allocate transit and parking benefits slightly differently. And perhaps most important, the value of a mass transit subsidy directly correlates to the reliability and availability of public transportation in a particular area. As for parking perks, when an agency offers them, it typically comes down to supply and demand. 

The Transportation Department, through its TRANServe program, offers guidance on how the mass transit benefit works, while the Internal Revenue Service handles tax regulations. As long as agencies adhere to the maximum monthly cap, stay on the right side of the IRS and ensure employees don’t misuse the subsidy, they retain a fair amount of flexibility in how they allocate the benefit. It’s no wonder employees are confused and frustrated over what they sometimes view as better benefits at another agency or in another region. 

Congress added to the confusion—and the parking-versus-transit debate—when it allowed the transit benefit to fall from $230 per month to $125 per month in 2012, while the parking subsidy increased to $240 last year. The current $245 per month cap, included in the fiscal cliff law, applies to both mass transit and parking, restoring parity to the benefit. 

Subsidized parking or lack thereof, however, remains a sensitive issue among many feds.

“Why on earth does the government provide a parking subsidy?” an employee at the Indian Health Service in Washington state commented. “If it continues to do so, shouldn’t it be for ALL government employees, rather than those (usually higher grade) federal employees who live and work in the D.C. area?”

Few issues get to the heart of the debate over Americans’ work-life balance like the daily commute. A Seattle-based employee at the Homeland Security Department said she drives to work because public transportation doubles her commute and isn’t widely available where she lives. But she has to pay to park, and between those expenses and gas, her monthly transportation costs are about $420 a month. Soon she may have to pay a bridge toll, which could tack on another $6 each day. “The way in which you get to and from work can have an impact on your life is just crazy,” she said in an interview.  When she previously worked in the D.C. area for a different department, she received a parking pass. The employee said the transportation expenses she incurs now were a major consideration in her decision to switch jobs—and will likely influence her next career move.

“At some point, I would definitely consider looking for jobs in the private sector, which is much more progressive  and forward-thinking than the federal government, especially in terms of flexibility and benefits,” the DHS employee said. “If the federal government could forge its way into more progressive policies regarding its recruitment/retention goals (e.g., giving employees transportation subsidy CHOICES, telework, etc.), I would never consider leaving because I love the work I do!”

The fiscal and political climate in Washington right now is not exactly conducive to allowing the government more flexibility in terms of employee benefits. In 2012, Rep. Mick Mulvaney, R-S.C., for instance, tried unsuccessfully to eliminate the mass transit subsidy for government employees through an amendment to the $17 billion Hurricane Sandy disaster recovery bill. Similar efforts could crop up again.

Transportation’s online TRANServe portal perhaps provides the clearest guidance on the issue to date: “The transit benefit is a subsidy, not an entitlement. Simply stated, it can go away.”

This article first appeared in the March-April issue of Government Executive magazine. 


By Kellie Lunney

March 28, 2013

http://www.govexec.com/pay-benefits/pay-benefits-watch/2013/03/commuter-benefit-chase/62126/