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Expiration of federal tax provision could impact transit ridership in 2011, report says


Public transit systems could experience a ridership drop in 2011 if Congress does not extend a pre-tax provision that reduces workers’ monthly commuting costs, according to a recent report issued by TransitCenter Inc., a non-profit provider of commuter benefit programs.

The American Recovery and Reinvestment Act of 2009 included a provision that increased the maximum pretax deduction that employees can apply toward monthly commuting expenses from $120 per month to $230 per month.

The provision is set to expire at the end of 2010, returning the maximum deduction to $120 per month. The decrease in the tax provision could lead to an estimated 5 percent to 9 percent drop in demand for public transportation, according to the report, which was commissioned by TransitCenter and conducted by management consulting firm Bennett Midland.

The report is based on data gathered from U.S. transit systems, and a range of analyses on changes in ridership to mass transit systems and the impact the increased transit benefit cap has had on trends related to commuting costs and economic influences on the use of transit services. About 30 percent of all transit users spend more than $120 per month on public transportation, the report shows.

Sen. Charles Schumer (D-N.Y.) and Rep. Jim McGovern (D-Mass.) are sponsoring legislation in the Senate and House that would maintain the transit benefit at $230 per month.

Contact Progressive Railroading editorial staff.

More News from 11/17/2010