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GRAFTON, Mass. — Speaking at the Grafton MBTA Commuter Rail Station on Tuesday, U.S. Rep. Jim McGovern announced his support for the inclusion of commuter transit benefit parity in the transportation authorization bill currently under consideration in Congress. He was joined by representatives from several participating organizations.
Until the beginning of this year, commuters were able to take advantage of a federal tax benefit—provided by their employers—that allowed them to deduct up to $230 of pre-tax income from their paychecks each month to cover the cost of mass transit. But Congress failed to extend this benefit, McGovern explained, and as a result, the benefit cap was reduced to $125 per month.
Randy Johnson, Vice President of Sales and Service at Edenred, a provider of commuter benefit programs, called the reduction "a tax increase on those Americans who already had the longest commutes."
Meanwhile, commuters who drive to work have been unaffected by the change. In fact, a recent cost-of-living adjustment now allows drivers to deduct up to $240 of pre-tax income each month for parking expenses.
This disparity has caused many residents of Central Massachusetts who work in Boston to reconsider how they commute to the city.
Mike Neville, Manager of Finance for Police, Security and Outside Services at Mass General Hospital, said that 10,000 employees—out of a total of 22,000—participate in the transit benefit program. But with their benefits cut, he said, "I know many of our people would opt to drive instead."
McGovern called for the transit benefit to be permanently matched to the one drivers still enjoy, adding that it should also be regularly adjusted for inflation.
"Making parity permanent will promote basic fairness in our transportation policy," he said.
Paul Dean, Vice President of TransitCenter, a group that advocates for public transportation, explained that Grafton residents commuting to Boston every day pay $250 per month for commuter rail passes. If offered the same benefits that drivers receive, he said, those commuters could deduct all but $10 of their monthly costs.
He also pointed out the many positives of encouraging public transportation, arguing that it is better for the environment, reduces our dependence on foreign oil and saves families money.
Still, McGovern said that efforts to fix this disparity have stalled in Congress.
"Nobody seems to be against this idea," he said, "but we can't seem to attach it to a bill that can pass both Houses and reach the President's desk."
He suggested that politics may be partly to blame.
"I think there are some who don't want the President to sign anything into law, because they think it will give him an advantage," McGovern said.
He added, however, that transportation issues have historically been non-partisan, and that both parties should be able to take credit for this benefit.
"It's a very simple detail in our public policy," said John Walkey, a Massachusetts field organizer for Transportation for America. "It keeps all the cars in this parking lot from sitting in the parking lot that would be—that is—the Mass Pike."
Comments (11)
While the ends may be laudible, this is why we have a 65,000 page tax code. Also, by issuing tax credits for people who work in the city, you are forcing me to subsize the lost revenue because I live and work in the same community and don't receive a commuter deduction. I have a five minute commute to work. Shouldn't I be rewarded for that under the logic of some of the other comments I read here?
Yes, Obummer will be releasing a CO2 credit for stay at home workers, who qualify for food stamps and section 6677-6677-6677 of the freebie me tax code. McGovern just wants to add the freebie: 666777-666777-666777 to the tax code.
And then both want to say, "The rich are not paying their fair share in taxes"
It's only fair, that the rich pay for transportation? Under article 66667777-66667777-66667777 to the new tax code.
Yes, good point. I guess it's inherently unfair once you start offering tax breaks and incentives, because you can't possibly give them to everyone that "deserves" them.
Want people to get off the road?--Make the other options more appealing by their own merit (not artificially). I think there are a lot of business opportunities available for more private transit involvement, and the MBTA is overloaded with debt. The commuter rail is already privately run, but surely there are options for more innovative and cost-effective, private involvement?
The state doesn't always make a habit of thinking outside of the box, but they are doing it with their accelerated bridge program, now. Maybe they should do the same with the MBTA.
Tax incentives may just be treating the symptoms, here. As we the people of the Commonwealth of Massachusetts, maybe all we need to do is get back to thinking of ourselves as a business. Giving out coupons may get customers in the door, but its quality, service, and value that keep them coming back. Maybe we should start rewarding employees and private citizens for developing and implementing sucessful money-saving methods/innovation within the government? I believe a little common sense and innovation can get us a long way.
I was pleased to see Congressman McGovern on Tuesday standing up strongly for fairness in commuter tax benefits. Since January, commuters who take public transportation have seen their federal tax benefit drop from $230 to $125 per month, while drivers have continued to enjoy a $240 tax benefit for parking. This gap is fundamentally unfair to those who take the bus or train to work. The policy is also harmful to the environment, traffic congestion, and the economy as it may encourage commuters to drive rather than use public transportation. Transportation for Massachusetts is proud to join Congressman McGovern in calling on Congress to act now and pass his legislation that would restore parity between parking and transit commuter benefits. As a society, we should be encouraging more use public transportation, not less.
John Walkey
Massachusetts Field Organizer for Transportation for America
and Organizer for Transportation for Massachusetts
I agree that we should encourage better transit options, use, and more walkable communities. I however feel that contrived incentives do not quite do the trick, though. We need to cultivate these other transportation options so that they can bear fruit and legitimately stand on their own merits and value without incentives.
It's great that Grafton has a train station, but how does the average person walk there? I believe that there are some basic things that any community can do to make their existing assets more valuable (sidewalks, pedestrian connections between cul-du-sacs, denser development, etc). The exciting part is that we as townspeople can move with town planners to encourage these sorts of things if we want (and we can do this sort of thing in small increments, too...).
Do I have this right?. If you commute to BOSTON, by train or car, you get a tax break. But if you commute somewhere else, such as Lexington (IBM), or Burlington (Nuance, and many others), you get no break. In fact, that tax break is subsidized by the non-Boston crowd. What if you commute in the other direction, such as Springfield or Worcester? Is this fair?
Geez...where is my Representative when we need to make this right. What? He is? McGovern is our rep? And he is sponsoring this inequality? I have another headache.
The article mentions a tax break for mass transit. So am I correct in understanding that the benefit can only be used in those cases where mass transit is possible? That would still be limited by Boston-centric transit infrastructure.
That's great that the program encourages people to use the transit we have; However, many people do not have the luxury of choosing their workplace based on proximity to transit.
To use the IBM example: Let's say someone from Grafton works in say IBM's Littleton, MA location... To take commuter rail, they would have to go all the way into South Station on the Worcester line, switch to the red line, then orange line, and then go to North Station to go back out to Littleton on the Fitchburg line, where they would have to get a ride for the last mile or so of the trip. Or--they would just drive up I-495. Imagine if somebody could just run a bus along 495 or 128 all day long to make those logical connections to all the commuter rail spokes. It seems simple and scalable to me. I guess it would be a"suburban ring".
Just a thought...
grommit,
The benefit is not limited to those who commute to Boston. Rep. McGovern and the other speakers were just using that as one example. This is a federal benefit. It's possible that companies like IBM and Nuance participate as well, since, if I understand the program correctly, they get a 10 percent break on their payroll taxes if they offer it to their employees.
Hope that clears things up.
I like to support commuter rail and public transit wherever possible. However, this is a tax incentive, not an entitlement. I would love to take the train to work, but the commuter rail system is Boston-centric.
Why not put the savings from the elimination of the incentive toward the expansion of available transit services and connections?
I did work in Boston for a few months--If you want people to take the train try these things:
1. Get downtown parking garages in the Boston area to raise their rates.
2. Lower the parking rates at suburban commuter rail parking lots.
3. Offer more frequent and reliable service.
The problem is that the train is such a hard sell when the price of parking and gas gets to be the same or less than parking at a commuter lot and taking the train. Families don't have that kind of money to waste just so they can "feel good" about taking the train.
Also, if I want to take my family on the train, I have to buy a ticket for every person. If I drive, I only have to pay for a tiny amount in extra gas for the additional people.
America is plagued by innefficient, sprawled development, and we are gradually working to fix this by implementing mixed-use, dense, walkable development, etc.
Here's an idea: Get a few dozen new companies to start up a network of commuter van routes (=new jobs). These routes would be nimble enough to connect less major town/work centers that commuter rail can't reach. Vans could easily be added or removed to match demand. These should be private companies that can stand on their own, with ride pricing that competes with that of single person commuting. This would need to be better than the Regional Transit Agencies or existing vanpooling (which are pretty lame).
It's good to see our Representative spending time and making headlines on such an important issue. Everyone else is frittering away their Congressional day working on ending wars, creating jobs, protecting us from terrorists, figuring our what China will do next, and tying to avoid bankrupting the country. Who is left to fight for tax incentives to use an ineffective public transportation system? Jim McGovern, that's who!
There are many folks in Grafton who use the commuter rail would benefit from the extension of this commuter credit and we would all benefit from having less cars on the road. I strongly support this effort.
Thank you Rep. McGovern for leading the charge.
Carrie Hogan