Benefit would revert back to a less generous deduction of $120 a month on Jan. 1, if higher figure is not reauthorized
A recent file photo of an NJ Transit train in Newark Penn Station. It’s not just millionaires who stand to gain from an extension of the so-called Bush-era tax cuts. Tucked into the tax cut bill, which passed its first hurdle in the Senate today, is a provision that would allow thousands of New Jersey Transit bus and train riders to save hundreds of dollars a year on their commuting costs.
The provision allows commuters to deduct up to $230 a month from their taxable income toward train, bus or subway fares, including monthly passes for PATH trains. The benefit would revert back to a less generous deduction of $120 a month as of Jan. 1, if the higher figure is not reauthorized. The House still has to approve a companion bill before President Obama can sign the $848 billion tax cut package, along with the commuter tax break, into law.
Before today's vote, Senators Robert Menendez and Frank Lautenberg were among a group of 18 U.S. Senators who had urged the ranking Democrat and Republican on the Senate Finance Committee to insert the commuter benefit into the legislation before it expired on New Year’s Day. In New Jersey, mass transit advocates said the commuter tax break was particularly important after NJ Transit riders were hit with a record 25 percent fare hike last May.
"New Jersey rail and bus commuters were hit by the largest fare hike in history this year, which is a prime reason that I led the push to deliver this tax relief," Menendez said in a statement yesterday.
The commuter benefit equals a $230 monthly parking deduction allowed for commuters who drive to work, which would have remained in place even if the higher mass transit benefit had not been reauthorized. Mass transit advocates say a higher parking benefit is unfair to bus and train riders and encourages motor vehicle use and the congestion and pollution that go with it.
Dan Stessel, a spokesman for New Jersey Transit, said the agency does not track the number of commuters who use the benefit. Zoe Baldwin, New Jersey advocate for the Tri-State Transportation Campaign, said 200,000 commuters in the Metropolitan region use the tax benefit.
Proponents say extending the higher, $230 benefit is crucial to commuters, because so many pay more than $120 a month in fares. For example, train fair from New Brunswick to New York Penn Station costs $361 a month. For that commute, tri-state group calculated, extending the higher benefit would mean a tax savings of $1,732 a year.
Previous coverage:
• NJ Transit approves law firm contract to fight $271M bill for canceled ARC tunnel
• NJ Transit moves forward in effort to privatize parking lots
• Commuters fail in last stand on NJ Transit board's vote to raise fares