Del. Eleanor Holmes Norton (D-D.C.) is introducing legislation that would nearly double the amount of money that public transit riders can set aside from their paychecks for a tax break on their commutes each month.
Norton said Tuesday that the transit benefit, which was cut from $245 to $130 last year by Congress, should be made equal to the $250 that U.S. drivers are currently allowed to put aside for pre-tax parking rates.
Norton said the disparity between the parking and transit tax breaks is negatively affecting ridership on the Washington, D.C. Metrorail subway system, as well as other public transportation networks thorough the U.S.
“Predictably, the unfair disparity between tax benefits for parking and transit has resulted in a big hole in ridership that can be retrieved only by getting riders back on mass transit throughout the nation,” she said in a statement. “Our bill is urgently needed to reestablish parity, so as to reduce the need for fare increases or service cuts.”
Officials with the agency that operates D.C. Metro, which is normally the second busiest transit system in the U.S., have blamed the transit tax break reduction for ridership declines for years, although some passengers have attributed the reductions to service problems.
“The decrease in the transit tax benefit has penalized a broad cross-section of Metro riders – both private sector workers and federal employees alike,” Washington Metropolitan Area Transit Authority (WMATA) Chief Financial Officer Dennis Anosike said in a statement when the benefit was first reduced in 2014.
“There’s no doubt that some commuters traveling longer distances are now finding it more affordable to drive than ride, and that needs to change,” Anosike added, alluding to the fact that Metro charges variable fares based on the distance passengers are traveling.
The amount of their monthly incomes that transit riders are allowed to set aside before taxes for their commutes to work was reduced from $245 to $130 at the beginning of 2014 over the objection of public transit advocates who argued that a similar tax break for drivers who park in garages was left unchanged.
Congress returned the transit tax break to its original levels during the lame-duck session that occurred after last November’s election, but only for the few weeks that remained at the time of 2014.
The transit tax break was originally increased to $245 in the 2009 economic stimulus package. The benefit was reduced when the stimulus ended in 2011, but it was later restored in the 2012 bill to push back the implementation of sequestration until early 2013.
The extension was only for one year, however, so the benefit returned to $130 on Jan. 1, 2014.
Transit advocates fought for a permanent extension of the increased commuter tax break during last year’s lame-duck session, but they were only able to win passage of a month-long extension.
Transit advocates complained that the late 2014 extension was essentially meaningless because the short-term increase was not retroactive and it was not approved by lawmakers until after the beginning of December, which would have been the cutoff for passengers to increase their pre-tax plans.
–This report was updated at 3:46 p.m.