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Legislation Would Require Businesses to Offer Pre-Tax MetroCards to Workers

By Dana Varinsky | April 27, 2014 5:25pm
 John Raskin discusses the benefits of the proposed legislation at a press conference with Council members Dan Garodnick and Helen Rosenthal.
John Raskin discusses the benefits of the proposed legislation at a press conference with Council members Dan Garodnick and Helen Rosenthal.
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DNAinfo/Dana Varinsky

CIVIC CENTER — Council Member Dan Garodnick announced legislation Sunday that would require businesses to allow their employees to buy MetroCards with pre-tax earnings.

The bill, which Garodnick plans to introduce to the Council on Tuesday, would require all employers with 20 or more workers to give them the option to pay for their transit with pre-tax dollars. According to a report by the Riders Alliance, a grassroots transportation advocacy group, this would save New Yorkers that buy an unlimited pass each month $443 per year.

“It’s hard to live in New York City, we all know that, and many of us feel like the MTA treats us like a piggy bank,” said Dan Garodnick at a press conference near City Hall Sunday afternoon. “Helping new Yorkers take advantage of this tax benefit is a way that we can put a little more cash in their pockets at the end of the day.”

The ability to pay for transit fares from pre-tax income comes from a federal law designed to incentivize the use of public transportation. Currently, the Riders Alliance estimates that approximately 750,000 New Yorkers are able to take advantage of this law.

However, riders are only eligible to pay for their transit with pre-tax dollars if their employers provide them the option to do so. According to John Raskin, executive director of the Riders Alliance, legislation that forces more businesses to facilitate this for employees would allow an additional 605,000 New Yorkers to access the benefit.  

“Fares keep going up and this is something the city can do to help riders save money,” Raskin said.

Dan Garodnick also explained that businesses giving employees the option to buy MetroCards with pre-tax earnings stand to benefit financially as well.

“It’s not just a savings for employees, but for the employers themselves,” he said. “Dollars come out before they pay their payroll taxes for their employees.”

According to the Riders Alliance report, employers who offer the benefit could save up to $103 per year in tax liability for each employee that utilizes the pre-tax option.

Councilmembers Ydanis Rodriguez, who chairs the Council’s Transportation Committee, and Helen Rosenthal, who represents the Upper West Side, joined Garordnick at the press conference to show their support for the legislation.

“We know that the fare increase is something that will continue happening at the MTA,” said Rodriguez, who added, “bringing a program that will make transit affordable for everyone is the right thing to do.”

After he introduces the bill, Garodnick said, it will go to the transportation committee for consideration. He said he hopes the initiative can be approved and implemented within a matter of months, though he acknowledged that businesses would need some time to adjust to the new law.

“We want to be sensitive to the fact that it would take some time to start up,” he said.