POLITICO Pro
Pre-tax questions remain for transit, parking parity
By Burgess Everett

7/16/12 5:33 AM EDT

The inequity between tax benefits for commuters that use transit and those that pay for parking is likely to remain through the year — until Congress confronts the “fiscal cliff” that awaits in December.

The last vehicle for raising public transportation pre-tax benefits from $125 to $240 per month left the station in the form of the surface transportation bill. Despite the political heft of Sen. Chuck Schumer (D-N.Y.) on the conference committee, the provision was left off as the GOP refused to touch a stimulus-era provision the party also feared could crack the door to taking up other expired tax extenders.

There are glimmers of hope for frequent transit riders, including the latest from Rep. Nan Hayworth (R-N.Y.). She recently introduced a bill that would bring parity through the end of 2013 by raising the $139 million in necessary annual offsets by dipping into a health care prevention account established during health care reform. Senate Democrats, however, have deemed that fund off limits.

It’s a frustrating dynamic to a bipartisan group of urban and suburban lawmakers that want to give constituents a financial break on one of the most elemental parts of American life: getting to work.

“You tell the story and it makes a lot of sense. Why are we discouraging people from riding mass transit and encouraging people to drive and park?” said Rep. Randy Hultgren (R-Ill.), who spearheaded a bipartisan plea to congressional leaders asking them to include transit parity in the transportation bill.

But it was left out, he said in an interview, because GOP leaders “weren’t going to do anything that got stimulus money in the past.” Transit and parking equality was first enacted in the 2009 stimulus package and was eventually extended through 2011. Though concerned lawmakers and advocates pushed hard for a renewal of the provision in 2012, on Jan. 1 the provision expired. Democrats are hoping eventually Congress forgets the provision was a piece of the Republican-reviled Recovery Act.

“There will be a wake-up call for some folks. This is stupid that you’re going to allow something that is a good idea … to forever be off-limits because of the word ‘stimulus’ or ‘Recovery Act,’” Rep. Earl Blumenauer (D-Ore.), a Way and Means Committee transportation bill conferee, told POLITICO.

As a foil to Hayworth’s proposal, Blumenauer suggested he’d like to shave off a few monthly dollars from the more widely used parking benefit of $240 a month to shore up transit. But speaking candidly, he said neither is realistic.

“You’re not going to rob health care. And some people would go ballistic by scaling down the existing parking benefit, even if it was just a couple of bucks. So it’s more likely, as it’s been done in the past, to be wrapped into something bigger,” Blumenauer said.

Blumenauer’s counterpart on Ways and Means during the bill negotiations, Rep. Patrick Tiberi (R-Ohio), agreed there’s no practical way for Congress to deal with a specific tax extender like that on its own or in the infrastructure bill talks.

“If you allow that in as part of the negotiation, why not allow other things in as part of the negotiation?” Tiberi said, noting that there are strong advocates for every one of the dozens of extenders hanging over Congress. “I don’t anticipate any of those getting attention until after the election.”

Hayworth said that “it being this time in the congressional cycle, it doesn’t particularly surprise” her that a standalone bill would have to be lumped into the broader financial discussion. But Hultgren, ever optimistic, said that given strong bipartisan support a stand-alone could move, “if leadership gave it a chance.”

It’s difficult to separate out how the drop in benefits has affected ridership numbers, but as an incentive to public transportation ridership a larger benefit goes a long way, said Rob Healy, a lobbyist for the American Public Transportation Association. Healy said the financial gain is noteworthy especially in big cities like Washington and New York where people use commuter rail during the first leg of their trip and then local transit, a combination that can easily cost upward of $200 per month.

“That higher level really is significant,” he said.

There’s also a practical concern at the constituent level, as riders who would use the maximum benefit are effectively paying several hundred dollars more than they did in 2011 during a period of stagnant wages. Employers also benefit come tax time, according to the New York MTA; the higher the benefit, the more companies save. Provisions that have a tangible effect on voters’ daily lives are worth a serious look, Blumenauer said.

“At some point it might be useful to show we can actually do something,” he said of Capitol Hill.

Adam Snider contributed to this report.

Reprinted with permission.