Mass-transit benefit declines thanks to congressional inaction

Are you a federal employee who uses public transportation to get to work? Be prepared to shell out more for your commute. Because of congressional inaction, a t...

Are you a federal employee who uses public transportation to get to work? Be prepared to shell out more for your commute.

Because of congressional inaction, a tax subsidy for mass-transit commuters is set to drop nearly in half — from a maximum of $245 a month to $130.

The mass-transit subsidy, one of just 55 expiring tax breaks, allows U.S. workers to set aside pre-tax dollars to use for commuting costs. The federal government, in a bid to encourage the use of mass transit, offers a similar program that provides employees with direct nontaxable subsidies for mass-transit use. Both are subject to the maximum limits, which are set by legislation and administered by the Internal Revenue Service.

Lawmakers introduced no fewer than three bills last term seeking to address the disparity between parking and mass-transit subsidies.

Last summer, Sen. Chuck Schumer (D-N.Y.) introduced the “Commuter Benefits Equity Act,” which would increase the mass-transit subsidy to $245 — the same as for parking benefits — and makes it subject to a cost-of-living increase in January.

That was followed by a similar House proposal, the “Commuter Parity Act,” introduced by Rep. Michael Grimm (R- N.Y.). Under Grimm’s bill, parking and mass- transit benefits would be equalized at slightly lower amounts — $220 for both — but would also be subject to an annual cost- of-living adjustment.

Most recently, Del. Eleanor Holmes Norton (D-D.C.), introduced a bill Dec. 12 that would extend the expanded mass-transit subsidy into 2014.

However, despite strong lobbying from federal-employee unions, legislative efforts fell short last term.

When the Senate moved Dec. 20 to take up and pass Schumer’s bill in a last-ditch end-of-the-year effort, Sen. Orrin Hatch (R-Utah) blocked the measure using a procedural move. Lawmakers then left Washington for the holiday recess.

While inaction on Capitol Hill means you’ll be paying more immediately, Congress could revisit the issue again later.

The last time the expansion of the mass-transit subsidy expired, Congress waited a year before extending it again. In the January 2013 fiscal-cliff deal, Congress increased the benefit and made it retroactive to the previous January.

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