A City Council bill from Dan Garodnick could save a lot of transit riders a nice chunk of change.
Federal law lets commuters spend up to $130 in tax-free income a month on transit fares. For a New Yorker earning an average wage, buying a monthly MetroCard with pre-tax dollars adds up to $443 in annual savings, according to Riders Alliance, which issued a report backing the benefit. But it’s only available through employers who offer the program.
Garodnick’s bill would require companies with a staff of 20 or more to make the benefit available to employees. The bill would make the benefit available to 605,000 New Yorkers, and commuters who work in the city but live elsewhere can also sign up.
Garodnick was joined by council colleagues Ydanis Rodriguez and Helen Rosenthal, along with Riders Alliance, at a Sunday presser announcing the measure.
“It’s not just a savings for employees, but for the employers themselves,” said Garodnick. “Dollars come out before they pay their payroll taxes for their employees.” The Riders Alliance report says companies that offer the program can save $103 per year per participating employee.
Riders Alliance estimates that the benefit would reduce city and state tax revenues by at least $6 million and $10 million, respectively. However, the report says, “not only would tens of millions of dollars be saved each year by New Yorkers, but it would also enter the economy in a way that directly encourages increased use of — and spending toward — public transit.”
With the lower tax burden, transit riders would collectively have $85 million to inject into the local economy, the report notes.
“Fares keep going up and this is something the city can do to help riders save money,” said John Raskin, Riders Alliance executive director.