ECFC Fights for Fair Transit Benefits
A study found that when offered tax-advantaged commuter benefits in the workplace, 18% of employees alter their commuting to use public transit. This equates to a 30% reduction in traffic congestion, per the non-profit TransitCenter.
Reforming the tax code is likely a component of discussions of the new 115th Congress as it prepares to meet in 2017. Tax-advantaged government benefits including these section 132(f) transit/commuter benefits are potentially on the chopping block. This is due to general misunderstanding of how they work and whom they help.
On November 28, 2016 two letters were sent to Congress by dozens of Transit Authorities and local and national organizations across the U.S. One letter was addressed to the Democratic Leader Nancy Pelosi and Ranking Member Sander Levin; the other letter was directed to House Speaker Paul Ryan and House Chairman Kevin Brady. The letters ask the government to keep employer-provided transit benefits, emphasizing that these benefits are cost effective without adding administrative tax burden. The Employers Council on Flexible Compensation (ECFC) has signed these letters. ECFC represents members, including Employee Benefits Corporation, that administer consumer-directed programs that include flexible spending accounts as well as transit plans.
While transit benefits help Americans save money on their commuting expenses and help businesses save in payroll taxes, they ultimately save the government money. Commuters using transit benefit programs to pay for using mass transit help support self-reliance of mass transit systems. These systems would otherwise rely on government subsidies. A second way transit benefits are beneficial to government is by reducing burden on our highway systems. More individuals opting to take public transportation, vanpools, and bicycle paths equates to reduced road congestion, vehicle emissions, and federal funding to repair and expand roads.
Transit benefits such as Employee Benefits Corporation’s CommuteEase help working Americans reduce transportation costs. Transportation expense is often the #2 highest household expense for middle class Americans. Removing transit benefits would increase payroll taxes by up to $1,200 per employed adult.
The 18% conversion from commuting in single occupancy vehicles to public transit (referenced earlier) results in a 3% reduction in vehicle miles traveled overall, equating to a 30% reduction in traffic congestion. Most people in the nation would be in favor of less traffic gridlock — hopefully Congress members feel the same.