The New Bay AreaTransit Benefits Regulation

Contra Costa County Climate Leaders

Average Commute in US: 15 miles.*

*Bureau of Transportation Statistics

The car that gets you to work emits 22 pounds of CO2 per gallon.*

*Average, US EPA

This equates to roughly 20 pounds of CO2 each way

or 40 pounds round trip.

…40 pounds adds up over time…

One day: 40 lbs. of CO2 not emitted

One month: 920 lbs.

One year: 11,040 lbs.

Taking transit instead:

One employee/year: 11,040 lbs. of CO2 not emitted

Five employees/year: 55,200 lbs.

Fifty employees/year: 552,000 lbs.

…Hence, SB 1339

Signed into law by Governor Brown on September 30th, 2012

Requires Bay Area Employers to offer transit benefits to their employees.

-- Company size: 50 or more employees (including part-timers

and temps).

-- Takes effect in 2013

-- BAAAQMD regulation

-- Based on Successful SF Ordinance in place for 5 years.

Transit Benefits…

Valuable Benefit

– 50% employees say impacted job decision 1

– 80% employers say it has a positive impact on recruiting and retaining employees 1

Contribute to Green Company Initiatives

– 81% surveyed employers report a positive impact on carbon footprint 1

– Employers claim they increase mass transit ridership by 10-40% 2

Good for Business

– Relatively easy to implement and offer employees

– Administration and/or fees can be offset by tax savings

– Corporate Responsibility and Sustainability are at all time highs

1. TCRP Report 87, 2003 2. The 2009 Commuter Impact Survey, TransitCenter

Benefits to Employees

Tax savings

– Federal, State, FICA

– Average savings between 30-40%

Potential additional savings

– Automotive costs, gasoline, wear and tear, total replacement

Personal benefits

– Reduced commute stress

– Additional productivity

– Reduced carbon footprint

Benefits to Employers

Payroll tax savings

– FICA, WC, State & Local Taxes

Supporting business initiatives

– Parking issues

– Help as recruiting and retention tool

Green Employer Initiatives

– Encourage use of mass transit; reducing carbon footprint

– Goodwill and public recognition; traffic congestion

Sample Tax Savings

Assumptions: Participation Rate 20.00%Percentage participating earning below FICA wage base: 100.00%

COMMUTE COSTS

Eligible Employees Participants Monthly Deduction Annual Average5,000 1,000 $100 $1,200

PARTICIPANT SAVINGS

Federal Tax State FICA + Medicare Average Savings25.00% 7.00% 7.65% $476

EMPLOYER SAVINGS

Pre-Tax Dollars FICA Medicare Annual Savings$1,200,000 6.20% 1.45% $91,800

Using average fees as an example, the tax savings created is better than a 183% ROI on the amount it would cost to offer the benefit!

STEP 1

STEP 2

STEP 3

Program Goals & Objectives

Help Employees with Commute Costs

If every employer offers…everyone benefits! (even those not taking transit)

Green Employer / Corporate Citizen Initiatives

Align to Business Initiatives

For both Transit and Vanpools

Commuter Program Options: Two ways to set up transit/vanpool benefit:

1. Do it yourself

Less than 100 employees

You have one work site

2. Have someone else do it for you—Outsourcing to a third party administrator (TPA)

Larger companies

Multiple work sites

Implementation ease

Online programs for smaller employers

Convenience

Options

Restrictions

Card can contain pre-tax and post-tax purses

Transit smartcards: Clipper in the Bay Area

Cost

Check on vanpool option

Commuter Card

Online Fulfillment Programs

Convenience

Options

Ordering/ fulfillment/ distribution outsourced

Communication/ enrollment via internet

Customer Service

Centralized delivery

Cost

www.commuterbenefits.org

Challenges

Cash Reimbursement

•IRC Code Section 132 (f) Requirements

•“Qualified Cash Reimbursement”

•“Readily available” voucher/pass options

•Double cash outlay for employee

•Cumbersome = deterrent to participation

Pre-tax and Payroll Issues

Inclusion of Shuttle Option

Concerns about Participation

Questions?

Why Your Company Should Offer Commuter Benefits

“The mode of transportation that you choose has a greater effect on the environment

than any other decision you make as a consumer.”

Union of Concerned Scientists

Cost neutral

Easy to Implement

Good for employer, employees

Environmental benefits

Questions?

Thank you!