Maybe it will get more people to bike

I should point out that I think this is awful - especially since the parking benefit will not also be going down.

Due to changes mandated by the federal government, the maximum allowable monthly allocation [for SmartBenefits] will decrease from $230 to $120 and commuters will no longer be able to bunch transit and parking benefits together. The change will go into effect on January 1, 2011

But it could get more people to bike (or some people to bike more) - especially if Capital Bikeshare could be paid for with the transit benefit.

Comments

[SJE]

I want to know why aren't parking benefits going down too.

[washcycle]

The limits were originally set by the transportation bill. But, as part of the stimulus bill, the transit benefit was increased to match the parking benefit. But that had a sunset clause, because it was assumed it would be dealt with in the new transportation bill. The sunset clause was politically desirable because it kept the total cost of the stimulus bill lower than an open-ended commitment would.

Problem is, Congress never passed a new transportation bill. So here we are.

[SJE]

So, yet again, we are subsidizing driving and parking.

[JeffB]

"Maybe it will get more people to bike" -- or maybe it won't.

Another delayed change is the threat to have your benefits expire at the end of each month. Not really an issue if you are a federal worker but for the rest of us who pay for these benefits out of our pocket ...

But riders are already upset about one change: At the end of each month, any unused transit or parking benefits in the new electronic purses will be credited back to employers. Metro said that employees who contribute a portion of their pretaxed salary to the SmartBenefits program should contact the employer to determine how the employer will handle the unused portion of their pretaxed contribution.

http://www.washingtonpost.com/wp-dyn/content/article/2009/10/27/AR2009102703957.html

This use or lose provision is especially hard on situational bike commuters.

[CyclingFool]

Combine this with the new rules re: SmartBenefits needing to be used during the calendar month or be forfeited, and you've got one serious kick in the balls to transit commuters.

Sadly, it's typical. Kinda like the bike commuter benefit only being available as a 100%-EMPLOYER paid benefit only and not on a pre-tax deduction basis.

I doubt it will get any more people on bikes. If anything, my first thought is that it will discourage some from multi-modal commuting and encourage people to drive by giving them more of a benefit (vis-a-vis transit) to park.

[w]

The government pays people more if they live farther from their jobs. This is a peculiar institution. I vote the abolition of parking and driving benefits over transit and less harmful methods of getting to work.

[Paul]

It's worth noting that the Feds are cutting yet another pre-tax benefit for workers at a time when the Treasury is desperately cultivating new revenue streams.

Two weeks ago, the USG announced that health care savings account holders can no longer use pre-tax earnings to cover purchases of OTC meds--unless you have a prescription. Given that an OTC med is, by definition, one that does not require a prescription, the only rationale for this policy change is that it will generate about $5 billion/year in new tax revenue.

Of course, this is chump change--but it's guaranteed change. Just try raising capital gains taxes...

[Jim]

One needs to distinguish the federal benefit from the maximum allowable untaxed benefit. The federal transit benefit is the same as the maximum allowable untaxed transit benefit, which is indeed less than the maximum allowable untaxed benefit (which is generally set at a level sufficient to cover a parking space near the US Capitol.

But the federal government does not provide most employees with parking spaces in urban locations. There are a limited number of spaces that go to carpools first (which are more energy efficient than mass transit), followed by managers and night workers, generally at a cost of about $100/mo (which covers the security guards). The net subsidy is about the same for parking and transit.

An obvious question is whether either really should be subsidized--or health care for that matter. It encourages living farther away, as w points out. But we have a system that does, so all that can really hoped for is probably that the subsidy be the same for all modes, not too excessive, and that the employee be allowed to pick her mode.

What annoys me most is that a suburban commuter might prefer to drive one day a week, take mass transit 3 days, and bike once. But the system makes you pick one mode. So people who actually can get a parking space do so, and then--having to pay full price for metro--drive more than they would have driven. If you want the bike benefit you must forgo that transit benefit.