Transit benefits package unexpectedly included in fiscal cliff deal 

click to enlarge Thanks to the fiscal cliff deal, up to $240 a month is available to commuters for transit costs.
  • Thanks to the fiscal cliff deal, up to $240 a month is available to commuters for transit costs.

While neither Republicans nor Democrats seem thrilled with the results of the deal resolving the fiscal cliff, transit commuters scored an unexpected windfall.

Included in the package of tax increases was the restoration of a commuter benefits program that allows workers to pay for up to $240 of their monthly transit costs with pre-tax dollars. Transit passengers could exempt up to $1,500 of their annual commute costs from taxes as a result of the legislation.

Originally part of the 2009 federal stimulus package, the $240 monthly program wasn’t renewed last year, which resulted in the perk being reduced to $115 a month. The reduction came at the same time that the amount motorists can write off for parking costs was increased from $230 to $240.

Restoration of the program was an unexpected boon to local commuters, said John Ford, executive director of the Peninsula Traffic Congestion Relief Alliance, a transit advocacy organization. Ford didn’t even know the program was back on the table.

“This is a definitely a benefit to commuters who use public transportation as opposed to traveling alone in their car,” Ford said. “We should be encouraging an increase in public transit in the region, and this is an important program to achieve that goal.”

Bay Area transit costs can be expensive — a monthly pass for a Caltrain rider commuting between San Jose and San Francisco is $338 — and more than 30 percent of regional passengers spend more than $125 a month, according to WageWorks, a commuter benefits group.

Sen. Charles Schumer, D-N.Y., and Rep. Jim McGovern, D-Mass., were the two congressmen who pushed for the transit benefits package to be included in the fiscal cliff deal, Ford said.

Rep. Nancy Pelosi, D-San Francisco, who opposed the expiration of the original transit benefits package, trumpeted the restoration of the $240 pre-tax levels.

“Restoring pre-tax transit benefits to $240 per month as part of the bipartisan fiscal cliff deal is a victory for our transit-first city and the thousands of San Franciscans who use BART and Muni each day to travel to their places of business and to their families at home,” Pelosi said.

And the package is retroactive to Jan. 1, 2012, which means commuters may be able to figure the benefits program into their upcoming tax returns. Because the deal was so unexpected, Ford said his organization is still trying to determine how transit riders can recoup their costs from last year.

With the transit-benefits package now matching the perks offered to motorists, public-transportation riders no longer face a financial bias from the federal tax code, said Michael Melaniphy, head of the American Public Transportation Association.

Tom Nolan, who sits on the Caltrain and San Francisco Municipal Transportation Agency board of directors, said restoring the benefits program will be a big help for the region, which struggles with traffic congestion.

“Any incentive to get people to take transit is a bonus,” said Nolan. “This was definitely a shock to me. Makes you wonder what else was included in that fiscal cliff deal.”

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Will Reisman

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