Happy New Year: Transit Subsidy Slashed By Congressional Inaction

When commuters throughout the Washington region head to their jobs in 2014 on board VRE, MARC or Metro trains and buses, they'll bear a larger chunk of those public transit costs.

The maximum subsidy — provided by both public and private employers — will drop nearly in half on Jan. 1 from $245 a month to $130. At the same time, however, the subsidy paid to car drivers for parking will increase by $5 to $250 a month.

“This is the biggest disparity between the two components of the commuter benefit that we have ever seen,” Natasha Rankin, executive director of the Employers Council on Flexible Compensation, told the Washington Post.  “For those who rely on mass transit, where you also have increasing costs, this is a double hit.”

The benefit affects commuters across the country. But the reduction will hit the Washington metro area particularly hard, the Post reported, because between 400,000 and 500,000 people take advantage of the tax benefit, according to WageWorks, which helps companies administer benefits.

Commuters using transit services such as Metro trains and buses, the Virginia Railway Express (VRE) trains, or the Maryland Area Regional Commuter (MARC) trains could be impacted by the change if they spend more than $130 a month on commuting costs.

Many of those are federal workers, as the president of the National Treasury Employees Union noted in a letter sent to senators.

The union's president, Colleen M. Kelley, wrote that “many of these employees, already subject to a three-year pay freeze, unpaid furlough days and higher retirement contributions, are struggling in the current economic climate, and a reduction in these benefits would impose an additional financial burden on them.”

The transit tax issue issue is part of a broader measure containing several tax benefit extensions that Congress did not act upon before recessing in December.

Sen. Chuck Schumer, D-N.Y., attempted to pass the measure in a separate "Commuter Benefits Equity Act" before the end of the session, but that effort failed. Schumer has said he will work to restore the funding retroactively when Congress returns this year.

For more information on the history of the subsidy and how it works, go to website of Commuter Benefits Work For Us, a coalition of industry supporters.