These 3 Charts Show That the Commuter Benefit System Is Terribly Broken
Congress recently failed to maintain parity for commuter benefits, granting drivers up to $250 a month but dropping transit riders down to $130. The decision is terrible for both sides — transit riders obviously lose, but so do drivers, since the incentive for a single-occupancy commute will increase traffic — but it shouldn't be that surprising. In fact the few brief years of benefit equality were the exception, not the rule:
That's from a recent brief on commuter benefits presented by the Center for Urban Transportation Research, at the University of South Florida. As the CUTR talk made clear, transit riders aren't the only commuters getting the short end of the benefit stick. A breakdown by wage group shows that workers in the bottom quartile of earnings are far less likely to have access to subsidized benefits than workers at the top:
Here's why subsidized benefits, in particular, are so important. Employers can give workers a commuter benefit by simply increasing salaries, or by subsidizing the full benefit, or by deducting the benefit from salaries before taxes. But these options are far from equal. Workers make out best in the subsidy option and worst in the pre-tax option (with benefits deducted from income before taxes). The latter remains common because that's where employers win:
The situation is even more broken for workers who commute by anything other than transit or automobile. The cyclist benefit is capped at $20 a month. Walkers or telecommuters are ineligible. Same goes for carpools (even though 6-person vanpools qualify under the transit benefit). Self-employed individuals also get nothing, which is totally at odds with the urban rise of the creative class.
So if the goal is to relieve pressure from urban transportation networks, federal commuter-benefit policy is failing our cities. And network pressure is indeed at stake. Transit benefits can account for 5 to 25 percent of system ridership and 5 to 40 percent of revenue. According to the CUTR brief, more than half of workers who took advantage of transit benefits previously had commuted by single-occupancy vehicle.
In many senses, then, the people who need commuter benefits most are getting them the least. Technically these benefits are called "qualified transportation fringe benefits," and the name is unfortunately apt — but not in the way the I.R.S. intends. These benefits aren't fringe because they're on the periphery, they're fringe because they're clinging to relevance by only a thread.
All images via the Center for Urban Transportation Research.