Transit tax break falls, driving benefit goes up

It doesn’t seem like the most intuitive move right now: cutting incentives for public transit while raising the rewards for driving to work.

The same changes are affecting transit riders across the country after Congress allowed transit pre-tax benefits to be cut in half. Advocates fear that could dissuade commuters from taking the train.

Starting this month, the amount SEPTA riders can set aside in pre-tax dollars to buy transit passes goes down from $230 to $125 a month.

“The people that are going to see an impact on this are the people that are living out in the suburbs,” says Jen Scimone, who works in SEPTA’s sales department. Since suburban train commuters pay the highest fares–monthly passes can be $191 a month–they’ll be forced to dip into their funds after taxes.

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More than 1,200 employers work with SEPTA to offer the benefit.

Enrollment in the pre-tax program went way up in Philadelphia when the benefit was high. Now, she said, recruiting new participants could be more difficult.

Geoff Anderson, president and CEO of Smart Growth for America, says the public transit benefit was briefly on par with breaks to pay to park at work. That benefit went up this year from $230 to $240.

“I think everything is sort of under budget scrutiny right now,” says Anderson. What we can afford is “certainly a legitimate question, but then I’d ask it about subsidies for all the different forms of transportation.”

The transit incentive went up as part of the federal stimulus, and Congress extended the benefit again last year.

Anderson says this year, the extension was sidelined in Washington during arguments over the payroll tax. He says advocates for the transit benefits will lobby to make them part of the next payroll tax extension bill, which comes up in February.

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