The change allows transit commuters to set aside $250 a month in pretax earnings to purchase transit tickets
Transit commuters who endured a 9 percent fare hike on NJ Transit earlier this year will be able to get some relief after an increase in a pre-tax transit benefit was approved by Congress.
U.S. Senators Cory Booker and Robert Menendez, D-NJ said their legislation gives mass transit commuters the same pre-tax benefits for transit commuters as drivers receive for parking.
It would put $1,000 back in pocket of a commuter earning a salary of $50,000.
The change allows transit commuters to set aside $250 a month in pretax earnings to purchase transit tickets, which makes it equal with the $250 drivers can set aside for parking. Before the change, transit commuters had a maximum of $130 a month they could set aide, while drivers had a $250 ceiling.
"It makes a big difference if (transit) commuters get as much as they spend on commuting as motorists do," said David Peter Alan, chairman of the Lackawanna Commuters Coalition. "For too long, transit commuters have been treated as second class citizens."
The transit pretax benefit increase is retroactive for 2015 and will go up to $255 in 2016, Menendez said. Congress approved the change last week.
"It was one of the things we fought tooth and nail to raise," Menendez said. "They're on the same footing. Pre-tax transit benefits are equal to parking benefits and are permanent.
Booker said the $1,000 in potential annual savings will help transit riders offset some of October's 9 percent NJ Transit fare increase.
"Providing the same tax benefit to transit riders is balanced and progressive fiscal policy," said Veronica Vanterpool, Tri-State Transportation Campaign executive director. "This makes sense for our environment and economy."
Alan echoed comments by Booker and Menendez that the tax incentive could also encourage drivers to switch to the train or bus.
"The last thing we want to do is encourage motorists to take autos through those (Holland and Lincoln) tunnels at peak hours," he said.
The legislation also avoids the uncertainty that transit commuters had in past years, when the transit benefit had to be periodically renewed. Renewal sometimes failed, such as in when the transit benefit expired on Dec. 31, 2013, and wasn't restored for 2014 until December, which was too late for commuters to take advantage of the benefit that year.Larry Higgs may be reached at lhiggs@njadvancemedia.com. Follow him on Twitter @commutinglarry. Find NJ.com on Facebook.
