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Sen. Charles Schumer: Keep tax break for LIRR riders

Sen. Charles Schumer announces the Commuter Benefits Equity

Sen. Charles Schumer announces the Commuter Benefits Equity Act, which would extend federal mass transit benefits that are currently scheduled to expire January 1st. (Nov. 11, 2013) Credit: Nancy Borowick

A federal tax break used by more than 700,000 New York area transit riders is weeks away from expiring and effectively driving up costs for the average Long Island Rail Road commuter by more than $1,300 a year.

Sen. Charles Schumer (D-N.Y.) and public transportation advocates Monday pushed for passage of the Commuter Parity Act of 2013, which would extend the Commuter Mass Transit Benefit at least through the end of 2014.

"We cannot let the transit benefit get knocked off the tracks," Schumer said. "New York commuters need every tax break they can get."

The benefit allows public transportation users to pay for the cost of their commutes with as much as $245 in pretax dollars each month through employer-administered programs such as WageWorks.

If the tax break is not extended, the allowed amount of deductible income will roll back to $130 per month -- the pre-2013 level, plus a small inflation increase -- on Jan. 1.

According to Schumer's office, the expanded tax benefit has been used by more than 700,000 commuters in the Tri-State area, saving them more than $330 million, since the beginning of the year.

The tax benefit is especially valuable to suburban commuters, including those on the LIRR, because their costs are typically higher than commuters who use buses and subways, said Dan Neuburger, president of WageWorks Commuter Services.

A commuter traveling between Garden City and Penn Station, for example, could deduct the entire cost of the $242 monthly LIRR ticket -- saving $1,344 a year, according to Schumer. The MTA has said the average LIRR monthly ticket costs $245.

"These commuters represent a broad cross section of the population, from hourly workers to CEOs," Neuburger said. "They're all looking to save as much money as they can on an already expensive commute."

In 2009, Congress first passed a bill bringing the commuter tax break for public transit riders to the same level as for motorists, but it expired in January 2012. In January 2013, Congress extended the increased benefit for another year.

Mark Epstein, chairman of the Long Island Rail Road Commuter Council, said it's long past due that Congress made parity between motorists and transit riders permanent.

"I feel like it's Groundhog's Day. It happens every year," Epstein said of the push to extend the tax break. "This comes up over and over again."

Epstein said the benefit helps offset past and future LIRR fare hikes, including another 7.5 percent increase planned for 2015. "In this economy, this is the worst time to be closing yet another tax break," he said.

Extending the increased commuter benefit or making it permanent is a challenge because of resistance from lawmakers in states where most commuters drive to work, Schumer said at a Grand Central Terminal news conference. He noted that a third of all public transportation rides in the United States are taken on the Metropolitan Transportation Authority.

Schumer said he hopes to extend the benefit by at least two years and will use his "clout" on the Senate Finance and Banking committees to include it in a package of other tax break extensions supported by Republican lawmakers.

"We are going to do everything we can to get it done by December 31," Schumer said.

Commuter Parity Act

Would extend existing tax benefits for mass transit use at least through the end of 2014

Allows public transportation users as much as $245 of pretax dollars per month to pay for commuting costs through programs such as TransitChek or WageWorks.

The current deductible amount saves many Long Island Rail Road customers more than $1,300 a year.

The amount is scheduled to roll back to $130 per month on Jan. 1. unless the existing deductible amounts are extended

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