An Environmental Program that Pays You for Using it?

Congressman Danny Davis kicked off a roundtable in Chicago’s Downtown Omni Hotel on Monday by providing a legislative context for the newly reinvigorated, federal commuter benefit program designed to save taxpayers millions of dollars, while reducing greenhouse gas emissions.

The program is called “Commuter Tax Benefits”, and on Monday morning CNT and its partners hosted more than 100 business leaders and a panel of experts to discuss the “win-win-win” possibilities for employees, employers, and the environment.

The Commuter program works like this: an employee can request up to $230 a month from his or her salary and the employer takes the amount they request from their paycheck and purchases a transit check. Where the savings come in is that neither the employer nor the employees have to pay tax on this money. With the government not taking a bite out of these dollars, employees can save up to 40% on various taxes and the employer up to 12.7% in payroll taxes. It may seem small at first glance but it adds up.

An employee who requests $230 saves $92 a month. That’s $1,104 a year. If 50 employees buy in, the employees will save $55,200. The employer saves $18 in payroll taxes from a $230 request. In a year, 50 employees will save their employer $10,800.

But it’s not just the money. Getting more people to take transit to work takes a big bite out of individual carbon emissions. An average person puts 40 pounds of CO2 into the atmosphere everyday during their commute. That’s 920 pounds a year and 11,040 pounds a year. Getting 50 employees to switch from driving to taking transit for a year keeps 552,000 pounds of CO2 out of the atmosphere.

At the roundtable, business leaders recalled the savings from using the Commuter program. Bev Ecker of World Book Inc. Chicago called it a “catch-free program that saves money every year for her company of 120 employees based in downtown Chicago.” Tim Grzesiakowski of Hewitt Associates said the program is widely used and appreciated by both commuting employees and management at his large, multi-national corporation based in the Chicago suburbs.

Ross Mirkarimi, of the San Francisco Board of Supervisors, discussed his popular San Francisco city ordinance that requires all employers with more than 20 employees offer the service. Calling the program a “no-brainer,” Chicago Alderman Manny Flores (1st Ward) said he is considering local legislation that would incentivize Chicago employers to use the program.

Read more about the Commuter Tax Benefits at the CTA and RTA websites.