The federal government will allow thousands of public transportation users, including some Long Island Rail Road riders, to recoup part of their 2014 commuting costs -- more than offsetting a planned fare hike in March.
Sen. Charles Schumer (D-N.Y.) announced Wednesday that Congress on Tuesday approved a package of tax breaks that includes the Commuter Tax Benefit. It allows public transportation users to pay the cost of their monthly commutes using up to $250 in pretax dollars through employer-administered programs such as WageWorks.
Schumer's office said President Barack Obama is expected to sign the bill this week.
But the deal falls far short because it's only retroactive to 2014 and will help relatively few transit riders, some transportation advocates contend.
"It's really not that great," said Rosemary Mascali, manager of Transit Solutions, a federally funded LIRR program that promotes public transportation. "I guess something is better than nothing."
When the benefit expired in January, the allowable amount of deductible income was rolled back to $130 per month -- the pre-2009 rate, plus a small increase. Meanwhile, motorists have been allowed to deduct up to $250 for parking costs.
"It was a great inequality that commuters using mass transit were forced to pay more than those that drove, particularly on Long Island and the greater New York City area, where mass transit is the lifeblood of the region," Schumer said in a statement.
However, the restoration of the higher rate is only retroactive to January, and will not extend into 2015. Schumer said he will "continue to fight" to make the higher rate permanent.
Mascali said to benefit from the restoration, commuters would have been required to have their employers set aside the full cost of their commutes -- the $130 in allowable pretax dollars and the remainder in taxed dollars. She said most employers don't offer that option.
"They would have had to have an employer that offers it and they would have had the presence of mind to do it," said Mascali, who estimated the number of people who will benefit from the retroactive tax break as being in "the thousands" among 700,000 people enrolled in commuter tax benefit programs in the New York area.
Those who are covered will get up to $600 back in tax credits or refunds, "which is great," Mascali said. "They can put that toward the upcoming fare hikes."
"That helps," MTA chairman Thomas Prendergast said of the benefit. "We hear people talk about how much a fare increase affects. On the net level, the more they could put on pretaxed dollars, the better for them, the better for us."
The Metropolitan Transportation Authority took another step toward making those fare hikes official Wednesday with the approval of its $14.4 billion 2015 operating budget, which assumes new revenue from the proposed 4 percent fare and toll increase expected in March. The MTA board will formally vote on the increase next month.
Before voting for the budget, several board members expressed their reluctance to do so without any plan in place to fill a $15 billion deficit in the agency's proposed $32 billion capital plan. MTA officials have said, without the state or federal government creating new revenue streams to cover the cost of maintaining and improving the transportation system, the agency will be forced to rely even more heavily on fare and toll revenue to meet its needs.
Board members noted that, while no new funding is on the way, many more people are riding trains. More than 6 million people rode the subways on six separate days in October -- an unprecedented number. To keep up with the surging ridership, MTA officials have said investments, including in computerized train signals and new subway cars, are essential.
"They cannot do more without more," said board member Charles Moerdler of the Bronx.