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The Need for Parity in Commuter Benefits | Commentary

Members of Congress from both houses and both parties are working to bring permanent parity to pretax benefits for transit and parking. Pretax commuter benefits save millions of middle-class Americans up to 40 percent on the cost of their commute to and from work. As president of WageWorks Commuter Services and former CEO of TransitCenter, one of my primary goals has been to impress on lawmakers the relevance of commuter benefits and the importance of permanent parity. This is ingrained in our vision at WageWorks, where we believe everyone deserves an easier, less expensive commute.

Recently, two pieces of legislation were introduced that would permanently codify the transit tax benefit at parity with the parking tax benefit. This legislation does more than just let Americans save money. Achieving permanent parity between the parking and transit portions of the benefit program brings about certainty for people. That certainty can help them establish permanent changes to the way they commute, moving toward increased usage of subways, buses, vanpools, etc., and away from the current frustrations that come from snarled traffic.

Besides helping commuters save money, passing this legislation will reduce traffic congestion and air pollution, as more commuters use public transportation. Without permanent parity, our country will maintain a policy favoring driving to work over the use of public transit — a policy that just doesn’t make sense.

At a time when many companies are increasingly concerned about their corporate carbon footprint, commuter benefits are an integral part of many companies’ strategies to reduce the environmental effects of commuting by giving employees incentives to use public transportation. Just think of how much less traffic and pollution we would have with fewer cars on the roads.

As part of the American Taxpayer Relief Act passed in January, lawmakers temporarily maintained tax-advantaged benefits for those using buses, subways, vanpools and other public transportation at $245 a month, matching the parking benefit. However, as of Jan. 1, 2014, the benefit amount for public transit will drop back down to $125 while the parking benefit remains at the $245 level. If Congress doesn’t act, it could cost each commuter more than $500 annually in increased commuting expenses. It will also cost employers up to an additional $110 annually for each affected employee as they will pay more in payroll taxes.

If passed, the bills recently introduced would finally achieve permanent parity between the parking and transit portions of the commuter benefit program and would eliminate the uncertainty surrounding the transit monthly benefit cap. This legislation will allow millions of commuters using public transportation, and their employers, to continue to realize significant cost savings.

Commuter benefits are a benefit to all Americans and the ongoing, bipartisan support to achieve permanent parity between the transit and parking benefits is a great step forward. Now let’s make sure we see it through to the finish line.

Dan Neuburger is president of Commuter Services at WageWorks, a leading provider of Consumer-Directed Benefits with more than 2.8 million participants.