by Brian Yu:
On September 30, California governor Jerry Brown signed into law SB 1339, a commute benefit ordinance for employees living in the Bay Area. The legislation allows the Bay Area Air District and Metropolitan Transportation Commission to require employers with 50 more more full-time employees to give their employees an incentive to use alternative methods of transportation other than private vehicles.
Under the ordinance, employers have several choices to offer to their employees. They may allow employees to pay for transit, vanpooling, or bicycling expenses with pre-tax dollars, provide a transit or vanpool subsidy of up to $75 per month, or provide a free shuttle, vanpool, or private bus service. Alternatively, employers are given the choice of designing their own alternative method to reduce employee vehicle trips to work. The Air District estimates that 60% of Bay Area employees, as many as 1.5 million workers, would be affected by this ordinance.
The goal of this program, which will last until January 1, 2017, is to reduce unnecessary vehicle trips and promote a cleaner environment. “Transportation accounts for the majority of air pollution in the region,” said Air District spokesperson Aaron Richardson in an interview in late October, “The Air District and MTC expect that encouraging transit in this way should help to substantially reduce air pollution and greenhouse gases.” Moreover, encouraging alternative methods of transportation is also projected to help reduce traffic congestion in the Bay Area.
While the program is currently only planned to last four years, many employers are expected to continue benefit programs past the 2017 sunset date, and many employees will have already formed habits of taking public transit- benefiting regional air quality in the short and long term.
In addition to environmental advantages, the Air District anticipates that employers and employees would benefit economically. Under the first option, which is to allow employees to pay for employee transit with pre-tax dollars, employers would not be required to pay payroll taxes on the portion of employee wages used to purchase transit passes. For employees, the benefit lies in money saved on commuting expenses- in some cases as much as 40% of total commute cost, or $500 to $1000 each year.
Similar commute benefits programs have already been implemented and demonstrated success in other cities- including Berkeley, Richmond, and San Francisco. The Air District hopes that similar success can be seen elsewhere in the Bay Area.
“This bill should help reduce both pollution and congestion, improving our overall quality of life in the Bay Area. It also offers financial benefits- especially with the pre-tax dollar transit pass option- to qualifying employers and employees throughout the Bay Area,” explained Mr. Richardson, “It’s a win-win situation for both the environment and the economy.”
Posted by Denise Rousset
on December 4, 2012. Filed under Business.
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