Issues and events that shape Long Island's economic and legislative landscape.

Wednesday, September 28, 2016

Letter on Commuter Tax Benefit

January 19, 2012

The Honorable Harry Reid
Senate Majority Leader
522 Hart Senate Office Building
Washington, D.C. 20510

The Honorable Mitch McConnell
Senate Minority Leader
317 Russell Senate Office Building
Washington, D.C. 20510

The Honorable John Boehner
Speaker of the House of Representatives
1011 Longworth H.O.B.
Washington, D.C. 20515

The Honorable Nancy Pelosi
Minority Leader, House of Representatives
235 Cannon H.O.B.
Washington, D.C. 20515

Dear Senators Reid and McConnell and Representatives Boehner and Pelosi:

The Long Island Association (LIA), which is the leading business organization of the region, strongly supports the restoration of a federal commuter tax cut that is crucial to both the New York State and Long Island economies. The full benefit was worth more than $1,000 per year to commuters; however, it was allowed to lapse at the end of 2011. It remains a sensible tax break that works and I urge you to reach a bipartisan agreement to reverse this tax increase as soon as possible.

In this struggling economy, workers are being saddled with a hidden fare hike while their paychecks are stagnant. The failure to extend the break will negatively impact 500,000 commuters in the greater New York metropolitan area, including riders of the Long Island Rail Road, and 2.7 million nationwide, incentivizing driving over the use of public transportation and increasing the cost to get to work. The LIA joins Senator Chuck Schumer and Congressman Steve Israel who have vigorously fought to restore and extend the benefit and make it retroactive to January 1, 2012.

The tax benefit had allowed employees to deduct up to $230 per month from their income, tax free, to pay for mass transit commutes, similar to the permanent benefit given to drivers for their parking costs. Oftentimes, employers assumed the full, tax-free cost. It also helped employers save money by lowering their payroll taxes compared to if they paid the money in wages. According to TransitCenter, in the New York metropolitan area, commuters saved over $200 million last year because of the transit benefit and employers have saved over $45 million since the benefit went into effect. Approximately 15,000 companies in New York offer the transit benefit covering more than a half a million employees. And in 2010, employers nationwide saved about $300 million in payroll taxes, money that can be reinvested to create jobs. Accordingly, it is illogical that the pre-tax benefit for drivers is increasing to $240 per month while the benefit for commuters has been rolled back to $125 per month.

The tax increase will have a negative impact on Long Island's business community and needlessly stall our slow and bumpy economic recovery. We urge you to put dollars back into the pockets of commuters by fully restoring the mass transit tax benefit, making it permanent and giving it parity with the drivers' benefit. Thank you for your consideration.

Kevin Law small low res_1.jpg

Kevin S. Law
President and CEO
Long Island Association


cc: Senator Chuck Schumer
Congressman Steve Israel