Last month, Governor Brown signed into law a $75 pre-tax transit benefit for employers to offer employees. It’s a partial fix to cuts to the federal transit benefit, which dropped from $230 to $125 this year.
I say partial because while the federal benefit applies to all companies, California restricts its new benefit to companies with 50 employees or more, excluding a hefty 40% of Bay Area workers. Another caveat is that employers may layer the two benefits rather than adding them together, meaning the first $75 would be exempt from state and federal taxes while the next $50 would only be exempt from federal taxes, enhancing the $125 benefit instead of creating a $200 benefit.
While $230 covered any bus transit commute starting in Marin and most starting in Sonoma, $200 isn’t enough to cover Novato transit commutes to San Francisco or many Sonoma commutes. As well, it still doesn’t make the transit benefit equal with the parking benefit; drivers, who get a $240 parking benefit, still have an advantage.
California still has a way to go to intelligently promote and fund transit, and the region continues to leave low-hanging fruit like congestion pricing on the tree, but it’s good to see the state step up where Congress has failed.