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Public Transit Tax Benefit Falls To $130

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Metro riders might be in for a rude awakening when refilling their Smartrips next month.
Jonathon Colman: http://www.flickr.com/photos/jcolman/387194641
Metro riders might be in for a rude awakening when refilling their Smartrips next month.

If you use public transit to get to work, the amount you pay out of pocket may go up in 2014 — and it has nothing to do with a fare increase.

Before wrapping up its work this year, Congress failed to maintain funding for the public transit tax benefit. So the monthly amount commuters can set aside before taxes to pay their fares will drop from $245 to $130.

At the same time, the monthly parking benefit is set to increase to $250.

Michael Melaniphy, president and CEO of the American Public Transportation Association, says this lapse could mean the amount of transportation funds riders could set aside pre-tax could decrease by $1,380 in annually. He says this leads to a lack of parity between those driving and those taking public transit.

"Congress must act now to maintain parity between transit tax benefits and parking tax benefits to ensure that there is not a disincentive for taking public transit," he says. "It is sound policy to maintain both the public transit and parking benefits at equal levels."

The last time the transit benefit was allowed to lapse, Metro lost rail ridership. Metro spokesman Dan Stessel says the same could happen again because of what he calls bad public policy.

"Because what we are doing here is incentivizing people to drive versus taking the train or bus," he says.

About a half million commuters use the transit benefit in the Washington metro area.

Correction: The original version of this story incorrectly identified the decrease in transportation funds saved.

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