Advocates, lawmakers plan fight to restore commuter tax break

WASHINGTON — — Commuter advocates and Maryland lawmakers say they will fight to renew an expiring tax credit that benefits mass-transit users, including MARC riders.

Current federal law allows commuters to withhold up to $230 in pre-tax income each month that can be used to pay for train and bus fares, but the cap will fall to $125 a month next year because Congress didn't renew the more generous break. The difference means a 22 percent increase in commuting costs for some, which can translate into hundreds of dollars a year.


"As these transit benefits expire, hundreds of thousands of Marylanders are going to see the cost of getting to work go up," said Maryland Sen. Barbara A. Mikulski, one of several Democrats who pushed to extend the larger tax break before its Dec. 31 expiration.

Congress left Washington for the holidays last week without addressing the break, so the lower cap is guaranteed to be in place for January at least. But advocates said they see opportunities to raise the issue again in the new year as Congress wrestles with other outstanding tax measures.


"It isn't over," said Robert L. Healy, vice president of government affairs for the American Public Transportation Association, which lobbied Congress to continue the break. "We will certainly be redoubling our efforts, particularly in the House."

Mass transit supporters say they are especially peeved that the tax credit for bus and rail commuters will fall at the same time that a similar credit for parking will go up slightly next year, allowing employees who drive to work to withhold $240 a month, up from $230.

That disparity, they argue, will make driving a better bet for some, adding to the already torturous rush-hour traffic between Baltimore and Washington.

A Maryland Transit Administration spokesman said approximately 9,000 MARC riders take advantage of the federal tax credit — about 60 percent of its ridership — along with about 6,700 bus riders. Washington's Metro reports that about 270,000 people receive the break.

Nationally, some 2.7 million commuters, mainly in large metro areas, use the transit credit. But, supporters acknowledge, the number who spend more than $125 per month is only about 250,000.

Pikesville resident Terri Gilyard said her out-of-pocket commuting costs will triple after the benefits run out.

Her husband drops her off at Penn Station in the morning, so she avoids the expense of parking, but it still costs her $277 per month round-trip to ride MARC from Baltimore to New Carrollton and then take Washington's Metro to her office near L'Enfant Plaza, she said.

Under current law, Gilyard pays taxes on $47 of the income she spends on her monthly commute. Starting in January, the amount will rise to $152.

"That's a huge jump," said Gilyard, a U.S. Department of Housing and Urban Development employee who has been commuting to Washington since 2003.

There was some bipartisan support for extending the tax this year. Sen. Scott Brown, a centrist Republican from Massachusetts, and Sen. Mark Kirk, an Illinois Republican, both signed a Dec. 9 letter asking Senate leaders to advance the bill. Mikulski and Sen. Benjamin L. Cardin, also a Maryland Democrat, added their names to the request.

But the proposal carries a price — about $158 million in lost tax revenue annually — and is not as high a priority for lawmakers who don't represent large cities. The more generous credit was created as part of President Barack Obama's 2009 economic stimulus. It was renewed in 2010.

For many Marylanders, racking up more than $125 in monthly commuting expenses is easy. An unlimited MARC pass for one month between Baltimore and Washington costs $175, for instance. Add in a round-trip Metro ride, and a commuter's monthly total can quickly exceed even the $230 threshold.


State and federal officials said federal employees account for the lion's share of enrollees, though the break also is available to workers at private companies that choose to take part.

Colleen M. Kelley, president of the National Treasury Employees Union, said the federal employees union will work to include the commuter benefit in a package of other expiring tax breaks that Congress will likely take up early next year. The group represents thousands of federal employees in Maryland, including state-based agencies such as the Food and Drug Administration in Silver Spring.

Supporters may also have an opportunity to work the issue into a long-term extension of the payroll tax cut, which is likely to come up again in February. Congressional leaders and the White House agreed Thursday to a temporary extension of the 2 percentage point cut.

In a statement, Kelley said the union would "continue to work on an extension of the transit subsidy when Congress returns."

"Extending the transit subsidy will help ease traffic congestion, reduce our nation's dependence on foreign sources of oil, and provide small businesses with a financial incentive to help their employees increase their disposable income," she said.

Anita Hunt, a U.S. Treasury Department worker who commutes to Washington from Towson, said she doesn't anticipate changing her routine because of the higher taxes. Hunt drives to Penn Station and takes MARC to work.

"What am I going to do?" said Hunt, adding that she has seen signs throughout Washington's Union Station alerting riders to the imminent change.

"I thought it was a good deal that the government pays us, in a way, for commuting," she said. "Of course, if they didn't, they may not have any of us working for them."



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