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Question of the day

Tuesday, May 13, 2008

* The setup

But what if your employer paid for you to ride to work on the CTA or Metra? […]

A recent study by Business Week found that more than half of workers in Chicago said they would take public transportation if their employer paid for it.

So on Monday, three Republican congressmen — Mark Kirk, Judy Biggert and Peter Roskam - announced their plan to make that happen.

Their bill would give tax credits to employers — a 50 percent tax credit for all free transit benefits provided to workers - up to $1,380 a year.

* Question: Is this a good idea? Also, should Illinois offer the same business tax credit? Explain.

- posted by Rich Miller


33 Comments
  1. - Squideshi - Tuesday, May 13, 08 @ 10:37 am:

    Yes. I think this is a good idea.


  2. - Rich Miller - Tuesday, May 13, 08 @ 10:37 am:

    Explain, please.


  3. - anon - Tuesday, May 13, 08 @ 10:45 am:

    A transportation perk, like health insurance and other employee benefits, can only last so long as the employer is big enough to absorb the cost and the the cash flow is liquid enough to wait for the credit. I would say it is in the government’s (i.e. yours and my) best interest to give the tax credit directly to the employees so that more people have incentive to use public transportation, not just those employed by the companies that can afford it.


  4. - Little Egypt - Tuesday, May 13, 08 @ 10:45 am:

    The Illinois State Medical Society in Chicago offers free transit rides to employees, at least they did when I worked for them a few years ago. Nothing was offered to the Springfield office employees; however, we had a parking lot behind the building. Parking is at a premium price in Chicago.

    What makes this a good idea and has way before oil hit $126/barrel is that Chicago has no real estate to give up for a flat parking lot. Springfield is of the mentality that a nice old building of 100 years can be sacrificed for a parking lot. God forbid Springfield should put up a multi level park deck. But that’s the mentality of this city - always has been and always will be. What was said in a song of the 60’s is true - “they paved paradise and put up a parking lot.”


  5. - Pot calling kettle - Tuesday, May 13, 08 @ 10:46 am:

    In the early 90’s, I worked for an employer in downtown Chicago who paid us $1/day to take public transportation or car pool. Lots of employees took them up on it. It worked!


  6. - Wumpus - Tuesday, May 13, 08 @ 10:46 am:

    Yes, but how much will it help ($1300+?) If it reduces gas demand, traffic congestion, road wear and puts money in the mass transit so they can stop raising taxes/fees, it sounds like a good thing.

    The 3 proposers being GOP, how likely is it to proceed with Emporor Pelosi-Palpatine at the helm of the House?


  7. - GoBearsss - Tuesday, May 13, 08 @ 10:47 am:

    How are the going to pay for it?!?!?!? BLOUGOHOPUOPBUOJGOBUOUBLLLBOUOUGHGHGHOUGUOBUBH!!!!

    The federal government provides (or at least used to) a transit allocation. They’ll pay for your monthly CTA card.

    I generally think tax credits are a facetious way of addressing problems, but the federal government has few avenues to affect behavioral change…


  8. - Ghost - Tuesday, May 13, 08 @ 10:47 am:

    It is a good idea. it helps to conserve fuel, reduce polution etc. Increasing revenues would allow for better transportation, perhaps a lot more security etc.

    Plus over time it would create predictable revenue streams for setting budgets.


  9. - The Doc - Tuesday, May 13, 08 @ 10:49 am:

    It’s a wonderful idea, save a couple of problems:

    1) How much tax revenue will be lost, and how will it be replaced (not just the business tax credit, but gas taxes as well)?

    2) Do the regional mass transit systems have enough capacity to handle the possible influx of riders as a result?

    3) Will the legislation actually entice drivers to ditch their cars? I’d guess that most drivers drive because there’s no convenient mass transit option, or they’re relatively unaffected by higher gas prices (read: wealthy). How will this bill change that?


  10. - Cassandra - Tuesday, May 13, 08 @ 10:57 am:

    So if you happen to have a generous or environmentally conscious employer, you get this perk (partially paid for by taxpayers who don’t get the perk but who will, in effect, be paying for it in reduced governmental revenues) but you will likely be among the happy few. Vast swaths of America have no access to public transportation, or there is no viable public transportation to and from their workplace. Just as 50 million Americans have no health insurance, most because their employer doesn’t offer it or the employer charges too much.

    Those Republicans. 80% of Americans want change in government and all they can come up with is more
    plans to scam the lower income groups and improve perks for the well off.


  11. - Policy from the Right - Tuesday, May 13, 08 @ 10:57 am:

    socialism - before we know it big government will have our employers being forced to provide us with a healthy lunch.


  12. - wordslinger - Tuesday, May 13, 08 @ 10:59 am:

    On a personal level, I’m all for it because I take the CTA already.

    On a macro level, I’m dubious about a free ride. I like to have a buy-in from those who use it. I already take the pre-tax set-aside for transit. A tax credit would be helpful.

    If the goal is get new riders, I have my doubts that it would attract that many. If $4 gas and $25 a day to park doesn’t get you on the El, I don’t know what will.

    If it does attract new riders, where’s the money for new cars, service, etc., going to come from?

    I don’t think the State of Illinois should do anything new until they clear their plate of what they have.


  13. - VanillaMan - Tuesday, May 13, 08 @ 11:00 am:

    It is a good idea that will work. It is practical and can be done now.

    What is going to frustrate partisans however, is that Republicans are proposing this. Sadly, it shouldn’t matter which party advances sensible environmental policies. But in our partisan political battles, one party has been painting the other as anti-environmental and stereotyping them nonsensically for political benefits. Consequentially they like doing this. If the GOP continues to advance green policies that are embraced by voters, we will all win, wouldn’t we?

    We are all in this together. Even the current Republican presidential candidate has a record of environmental activism. So it looks advantageous to be seen as green for both parties.

    As a result, we have seen this very smart proposal. We can do this now while we continue to examine other policies that will positively impact our environment within the rhelms of reality.

    Theodore Roosevelt and Mr. Earth Day himself, Richard Nixon, would be proud of the GOP today regarding their party’s stands on the environment.


  14. - Vote Quimby! - Tuesday, May 13, 08 @ 11:01 am:

    I like it…if specific companies offer the perk, perhaps groups of employees will travel together. Being the sheep we are, if we have friends travelling the same way we may put up with the hassles of mass transit (remember Elaine’s subway disaster in Seinfeld?).
    I would be worried about capacity…if people try it and are late or otherwise inconvenienced, you may have lost them forever.


  15. - Plutocrat03 - Tuesday, May 13, 08 @ 11:02 am:

    Where will the money come from to cover the portion of the operating budget which is not covered by the fares?

    A single new rider (CTA) riding round trip each work day would require an annual subsidy of at least 800.00. An increase of 100,000 daily riders would consume $80,000,000 in subsidies each year. If the rider will not pay, then who will?


  16. - Squideshi - Tuesday, May 13, 08 @ 11:02 am:

    I think this is a no-brainer. It’s a boon for business, the environment, and commuters. This is an idea straight out of the Green Party’s national platform. Article III, Section C, Subsection 8 provides, “Encourage employer subsidies of transit commuter tickets for employees, funded by government Congestion Management grants.” Kudos to Kirk, Biggert, and Roskam on this.


  17. - Chanson - Tuesday, May 13, 08 @ 11:03 am:

    It would be fine except the unions would throw a fit if the employees not living where public transportation is available, were not also compensated in some way.


  18. - Anonymous45 - Tuesday, May 13, 08 @ 11:03 am:

    This idea is already at work for Metra and State employees–I am waiting for Da Mare to ban car traffic in the Loop…with drivers using cellphones and other ADD like syndromes affecting drivers, walking in the Loop is akin to risking your life at lunchtime or walking to a meeting…I think it should cost $25 to drive in the Loop between 8am and 6 pm…


  19. - colbycakes - Tuesday, May 13, 08 @ 11:05 am:

    My school and my summer job both do this. I know a lot of my fellow students and workers take the El a LOT more because of it (I do, too, but I don’t count because I don’t have a car).

    My worry would be that the CTA/RTA isn’t equipped to handle that many extra passengers. But if it is, I’m all for this idea.


  20. - anon - Tuesday, May 13, 08 @ 11:05 am:

    Further, if public transportation agencies currently pay the taxed price of gasoline, then those entities should be able to tank up on gas at its “raw” cost, that is, the cost before any local, state, or federal taxes of any kind are added. That should help drive down operating costs.

    Less wear and tear on roads and bridges means less revenue is needed to maintain them, unless of course that revenue is being swept for other purposes.


  21. - What planet is he from again? - Tuesday, May 13, 08 @ 11:13 am:

    I’m in favor of encouraging use of public transit, even though it’s not available where I live and probably wouldn’t take it even if it were (I’m always going places at lunch and need a car for that.) We State employees have a benefit available where we can pay for commuting costs (transit and/or parking) with pre-tax money, so there’s some savings there. Even that might be a good idea to extend to everyone.


  22. - Ghost - Tuesday, May 13, 08 @ 11:18 am:

    Cassandra to say taxpayers are paying for it does not flow.

    To begin with, taxpayers fund the current mass transit to make up for its lost revenue. So if the revenue increases the tax payer obligation is reduced. Second taxpayers pay for repairing roads and bridges which wear out faster with greater traffic levels. Reduce the number of cars and there is less wera and tear for the tax payers to be saddled with.

    Also the tax payers are not haviung their taxes increased to offset the decrease collected from business, so it is not logical to claim the tax payers are flipping the bill.

    Add it up and the whole program reduces capital and fincial burdens on the State from EPA, to traffic enforcement while increasing cash on hand for the tranist providers.


  23. - Anon - Tuesday, May 13, 08 @ 11:21 am:

    “We State employees have a benefit available where we can pay for commuting costs (transit and/or parking) with pre-tax money, so there’s some savings there. Even that might be a good idea to extend to everyone.”

    That’s a federal tax provision that is available to any employer who wants to take the trouble to do it. It can be part of a “cafeteria plan” where the employee can choose to take taxable cash or a non-taxable public-transportation subsidy, so the cost to the employer is for administering the program rather than increasing pay.


  24. - Carfree Chicago - Tuesday, May 13, 08 @ 11:22 am:

    Well we should at least start by offering the same tax credits for transit as we do for parking. Federal policy gives a tax-free allowance of $220/mo. for parking vs. $115 for transit. Why the inequity? At the very least, our state could provide a tax credit that would make up for the IRS’s prejudice against transit.


  25. - zatoichi - Tuesday, May 13, 08 @ 11:37 am:

    Great idea, but what of all the non-Chicago drivers who put in 30 miles one way to get to Peoria, Decatur, Centralia, or Carbondale or simply have no mass trans in their area. I like the idea of a tax incentive to the employee much better. It covers many more people. Is that $1,380 per person or a grand total for each company?


  26. - Boone Logan Square - Tuesday, May 13, 08 @ 11:38 am:

    I would take advantage of this policy if it gets enacted. I would take the CTA anyway, but would certainly be happy to have my employer subsidize it.

    Using tax law to encourage mass transit use in the Chicago metropolitan area is a step towards reducing congestion in one of the worst traffic corridors in the United States. I salute these three Republican reps for encouraging mass transit use and hope they will support more funding to maintain the CTA’s lines and stations in the future.


  27. - 47th Ward - Tuesday, May 13, 08 @ 11:56 am:

    In theory, a very good idea. In practice, not so much.

    Key problem: there is no single fare structure for all three service boards, CTA and Pace are mostly uniform, but Metra prefers to remain in full 19th Century mode. Unless Metra revamps its fare structure, this proposal won’t work. Employers will have to pay for a discount on CTA/Pace and another for Metra. It is the same as college students with U-Pass who can’t use it on Metra (and Metra refuses to offer its student discount to college students — don’t get me started on that).

    Plus, has anyone studied the impact of a surge in ridership? During normal peak hours, I suspect the system is at or very near capacity. I don’t know if they can handle another 100,000 daily rush hour commuters. I wish they could, but I’m not convinced they can.

    We really do need and deserve a modern mass transit system. Too bad we’re not likely to see one in our lifetime.


  28. - Cassandra - Tuesday, May 13, 08 @ 11:59 am:

    Although I am strongly opposed to using the tax system to implement social policy (our tax system already is an incredibly complicated mess, a mess which tends to favor the rich and powerful) I don’t see an end in sight, so I suppose some type of tax credit for using public transportation isn’t any worse than any other perk. However, I’d like to see the demographic analysis of which citizens, exactly, would benefit. It sounds like
    employed citizens in urbanized areas. And if corporations are getting a tax credit to do this…they are paying fewer taxes into the general coffers, right? Taxes which in theory benefit all citizens. There really is no free lunch and when you play with the tax system, somebody has to pay for somebody else’s perk.

    I also would really question if a few more citizens using the CTA would have a noticeable effect on pollution levels. The majority of citizens would likely continue to drive cars, after all, even if they don’t drive them to work.


  29. - 10th Indy - Tuesday, May 13, 08 @ 12:16 pm:

    Wonderful idea. It’s not every day you see legislation that offers real help to businesses, the environment and ordinary people. I would think the existing transit check program could provide a good mechanism starting point, and I am sure surging ridership is a problem that most transit agencies would love to have. Great job Kirk, Biggert and Roskam - hope the Dems in the delegation get on board.


  30. - cermak_rd - Tuesday, May 13, 08 @ 1:17 pm:

    My company is currently promoting a Pace vanpool concept whereby a group of employees will commit to sharing a ride and Pace provides a van for the purpose. Maybe a concept like this could be provided in non-public transportation areas?

    Oh, and Policy from the Right–

    My employee provides me a piece of free fruit every day. Not a healthy lunch, but a good start. Not sure if they get any gov’t benefit for it though, I think they do it for health care cost containment.

    I like the idea. It will, however, likely result in larger companies offering this perk and smaller companies being unable to, due to cash flow issues etc. That will be yet another disincentive for employees to go to or stay at a small business, though in today’s economy, that probably doesn’t matter that much.


  31. - PhilCollins - Tuesday, May 13, 08 @ 1:35 pm:

    If this bill passes, those employers will have higher costs, and many of them will probably increase their prices. Each worker should decide whether he or she will use public transportation without increased government involvement.


  32. - Anonymous - Tuesday, May 13, 08 @ 4:24 pm:

    i have several friends that work at doj in DC, they get 50% of their travel expenses paid for. They get metro passes in the mail every month, they love it (i love it to since i dont have to pay to take the metro when i visit). Its a nice perk, and nice way to encourage people to use public transportation


  33. - pjs - Wednesday, May 14, 08 @ 8:48 am:

    excellent idea for a lot of the reasons already stated but I’ll add one more. We simply cannot continue to grow as a region (NE Illinois that is) if people don’t take transit. there isn’t enough room on the roads to accomodate another projected million cars. SO, we must make better use of our existing roads and rights-of-way by moving more people per square foot (ie bus and train).


Sorry, comments for this post are now closed.


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