May 11th, 2016
After testifying before the Massachusetts State Legislature calling for the state’s tax code to reflect changes made to the Federal transportation fringe benefit, MassCommute submitted the following letter in support of a new bill by Senator Keenan that would make transit parity a reality for Massachusetts commuters:
Representative Dempsey, Chairman
House Way and Means Committee
Room 243,State House
Boston, MA 02133
Re: S2217 - An Act relative to commuter transit benefits
Dear Chairman Dempsey,
On behalf of MassCommute, the Massachusetts statewide coalition of Transportation Management Associations (TMAs), I am writing to express our support for S.2217 “An Act relative to commuter transit benefits” sponsored by Senator Keenan and reported favorably by the Joint Committee on Revenue last week. The TMAs of MassCommute collectively represent over 300 businesses and employers with more than 300,000 employees in 42 municipalities across the Commonwealth. As public private partnerships, we work collaboratively to create innovative solutions to transportation challenges that reduce traffic congestion, improve air quality, and increase opportunities for economic development.
Earlier this year, we stood with our partners at Transportation for Massachusetts and the Association for Commuter Transportation (ACT) to applaud the Commuter Benefit provision that was added to federal legislation to ensure permanent parity for public transportation and bike commuters thanks in large part to the hard work of Massachusetts 2nd Congressional District Representative Jim McGovern. For much of the past 25 years, automobile commuters have enjoyed a disproportionate benefit, providing an incentive for drivers and leading to congestion and pollution. Parity is important so that people and employers can make commuting choices that are best for them, and we know that employees are significantly more likely to choose transit as a result of this legislation.
Unfortunately, inequities in the Federal cap for transit and vanpools and the Massachusetts cap for parking and vanpools create a system that is confusing and serves as a disincentive for many employers to offer the benefit. Massachusetts is one of only three states (that we are aware of) in which the cap on transportation benefits does not automatically increase with the Federal cap.
A 2011 study conducted by the Commuter Benefit Work for Us Coalition found that 77% of small businesses and corporations said they were somewhat or very concerned about inequities in the transit benefit and 60% of large companies with offices in more than one metropolitan area stated that they feared employees would decide to look for elsewhere.
The transit benefit has been used as a tool to promote transit use, conserve energy, improve the environment, and ease congestion. The same study by the Commuter Benefits Work for Us Coalition found that more than 3 million working Americans across the country utilize this benefit. Based on the approximately 150,000 people who use the transit benefit in Massachusetts-the Association for Commuter Transportation estimates that if those people were to stop using transit and drive to work alone it would create a line of cars sitting bumper to bumper from Boston, MA to Baltimore Maryland, with another 18 miles worth of cars to spare.
Employers recognize the transit benefit is an effective tool in recruitment and retention of good employees. However, the burden of a multi-tiered system often outweighs the benefits. The data stated above is reflected in some of the anecdotal evidence we have seen. Small businesses may not offer the transit benefit because of the complexity dealing with different Federal cap and State caps. In the same vein, companies that have employees around the nation opt to not offer the benefit at all to Massachusetts employees in lieu of creating accounting systems designed for only a small segment of their employee base.
The transit benefit helps reduce congestion, improve air quality, and conserve energy, all of which are well established state goals in Massachusetts. Our policies should look to support transit benefit usage, not provide barriers. We strongly urge this Committee to act swiftly on S.2217 and urge its passage as soon as possible to correct this technical abnormality.
Please do not hesitate to contact either of us to discuss this further
Julia Prange Wallerce, Executive Director Patrick Sullivan, Managing Director