Federal transit benefit cut could greatly affect Metro ridership - Los Angeles News | FOX 11 LA KTTV

Federal transit benefit cut could greatly affect Metro ridership

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WASHINGTON -

Commuters stand to lose big and so does Metro when a federal transit benefit cut takes effect January 1.

The program gives tax breaks to commuters who use mass transit and a subsidy to federal workers. It is set to drop from $245 a month to $130. The drop could send Metro's ridership and revenue plummeting.

Congress failed to renew the transit benefit at the higher level before it went home for the holidays. So commuters who use mass transit, both federal and private sector workers, will have to shoulder more of the cost. For Metro, the less money those workers have to spend, the less they may ride and that could be costly.

To start, federal workers will see the biggest loss. Congress' parting gift was almost Scrooge-like. While lawmakers remain on vacation, federal workers who are on the job will see the biggest cut to their transit benefits. Because it is a subsidy, they will lose $115 a month or about $1,400 a year.

"We'll just have to make it up out of our pocket as usual,” said Jerrell Perry, who uses the federal transit benefit. “Monthly, it's going to take down on the cost I have to spend every month on my bills to pay to travel to work."

He says he won't be able to cut back on how much he uses Metro because he needs to get to work, but will be forced to pay more out of pocket.

The benefit goes beyond federal workers. Commuters who use mass transit can set aside pre-tax dollars. That amount will also drop to $130 from $245, which means they will lose about $400 a year in tax savings.

None of that compares to Metro. In 2012, when the benefit was cut, Metro's ridership dropped by 9.5 million and fare revenue fell about $20 million below budget. Some of that was blamed on Hurricane Sandy, a fare increase and unexpected federal holiday, but the transit agency blamed a large chunk of that on the cut to transit benefits. It was eventually restored, but only temporarily until the end 2013.

"That could put more pressure on our budget looking ahead to next year,” said Metro spokesperson Dan Stessel. “We're very hopeful Congress will take action on this as soon as they come back into session early in the new year."

The potential losses come at the same time Metro is proposing to increase fares next year and facing steep losses from the delay in opening the first phase of the new Silver Line.

While transit users lose, drivers will see a monthly parking benefits increase to $250. If you think all this doesn't affect you, it could. With parking benefits going up, some of those who used mass transit may find a financial incentive to drive, adding more cars to the already congested roads.

Nicole La Borde, who recently started working for the federal government, says she may have to consider using Metro less.

"It's not easy, but what can you do?” she said.

Congress could restore the benefit. If he had a message for Congress, Perry said, "Please increase the money."

The last time the transit benefits were cut in 2012, it took Congress a year to agree on an increase in the 2013 budget deal. The benefit was retroactive, but by then, there was no way many could use all the funds in time.

More than half of Metro's rush hour riders are federal workers, which is why the transit agency could take a huge hit.

Metro is keeping a close eye on what Congress does. It can absorb short-term losses, but longer term losses may force Metro to make budgetary adjustments.


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