Transit once again taking back seat to car
Inequity in pretax benefits shows the disparity
How strong is the grip of auto-centric thinking in the “progressive” state of Massachusetts?
Pretty strong. Stronger, in fact, than you might think.
In the state whose voters rejected increasing the state gas tax to keep up with inflation, we are about to once again increase MBTA fares. That is strong evidence of our auto-centric ways, but it’s not what I’m thinking of today.
The city of Boston thinks it’s OK to disrupt a major transit line to accommodate an Indy car race, a one-off, for-profit event proposed for later this year. That is evidence that we do not value transit here, but it’s not what I’m thinking of today.
And then there’s the imminent loss of late-night MBTA service, despite data proving that late-night service (if properly deployed) would be highly successful and support working people and the restaurant/entertainment business. Any place that purports to be a world-class city would consider affordable late-night service a requirement for a thriving economy, and for social justice. But, again, that’s not what I’m thinking of today.
What I’m thinking about today is a different, and in some ways more telling, piece of evidence that we remain in the grip of mid-20th century auto-centric thinking.
Congress late last year enacted a comprehensive transportation law, a five-year authorization bill known by the acronym FAST. The FAST Act is full of funding gimmicks and weak when it comes to support for sustainable mobility. In many ways, the law is a step backward rather than an improvement, but given the current national political gridlock, any transportation funding act that could pass Congress and get signed into law by President Obama was deemed a step forward.
One bright spot in the bill was its move toward equalizing the pre-tax benefit for commuters, whether they drive or take transit. Previously, the deck was stacked against the transit user, as commuters could set aside up to $250 each month in pretax salary toward their employer-provided or reimbursed parking costs, but transit riders could set aside only $130 each month for their use of public transportation through employer-provided transit passes. The new federal law now allows a pretax set aside of $255 per month for both transit riders and automobile drivers.
This was welcome news, as the previous tax scheme worked as a potent disincentive for transit use. The new federal law creates an incentive to take transit, reducing the cost of public transportation for many transit riders by allowing them to pay for their employer-provided transit passes with pretax dollars. These transit riders could expect to enjoy equal treatment with auto drivers for the first time in years. According to Bloomberg News, states across the nation have been quickly following suit to conform to the new code for their own state taxes. Massachusetts thus far is not one of those states.
Our 2016 commuter benefits adhere to the old federal law, thus discriminating significantly against transit riders. The Department of Revenue signaled this in a technical information release late last year, making it clear that “The Massachusetts exclusion amounts do not include the increase in the federal exclusion amount for the combined transit pass and commuter highway vehicle transportation benefits that was signed into law on December 18, 2015.” The reason? DOR stated that it would not allow Massachusetts taxpayers to benefit from the new federal law “unless the Massachusetts Legislature acts to adopt such changes.” And that hasn’t happened.
I’d like you to focus on the fact that the MBTA is preparing to raise fares once again, despite an improving outlook for its operational budget and despite not having a plan to fund the $7 billion state-of-good-repair funding need. Not only are fares going up, but we are not offering transit riders and cyclists the tax benefits that they are entitled to under federal law. Yes, Massachusetts taxpayers can benefit from certain deductions for their tolls and transit costs, but why should transit riders be deprived of a benefit that many of their national counterparts are able to enjoy?
I suppose we can accept this as simply a huge oversight, but it seems to me a reflection of something else – a persistent failure to embrace sustainable mobility as the lynchpin of 21st-century mobility in Greater Boston. We see this reflected in each of the examples I mentioned earlier in this article. We see it reflected now in our tax code.
When the Legislature in 2013 enacted into a law a so-called “tech tax” that would raise about $160 million to support transportation funding needs, the business community rallied to repeal it, asserting that it was a potential jobs killer. I supported their opposition to the tech tax as I adhere to the belief that we ought to generate, as much as reasonably possible, transportation revenue from transportation sources. A mere two months after the tech tax was enacted into law – two months – it was repealed by the Legislature and the repeal was approved by the then-Democratic governor.
My challenge to the business community is this: Use your power to get the state law fixed, so your employees who use transit can benefit from the new federal law giving them equal treatment with drivers. While you are at it, get the state to include cyclists in the mix as federal law allows. Use the same power and political force to get this done that you used to secure repeal of the tech tax in two short months. Put your political muscle behind the people who work for you and who take transit and who cycle to work.And I will throw out another challenge to the Commonwealth: Let’s not hike fares until the state law is changed to allow transit riders to take full advantage of the new federal law pretax set-aside. If we all agree that equity is the foundation for the kind of society we want to nurture in Massachusetts, then let’s start by taking swift action to bring some measure of equity to how we treat taxpayers who are transit riders and cyclists.
James Aloisi is a former secretary of transportation and a principal at the Pemberton Square Group.