What’s Going On??--

Understanding the Existing Business Support of Transit Benefit Ordinances

What does a Transit Benefits Ordinance Do?

• It gives employees chance to consider other ways to get to work—and it rewards them financially for doing so.

• Gives employers compelling reason to consider program that saves payroll taxes, improves employee morale, and improves environment—at no cost.

• It has impact--with increases in transit usage there is less traffic and improved air quality for all.

Transit Benefits Ordinances

• The San Francisco Board of Supervisors passed initial legislation on August 8, 2008

• The San Francisco Airport Commission unani-mously passed similar legislation on July 7, 2009

• The City of Richmond, CA unanimously passed similar legislation on July 7, 2009

• The City of Berkeley will have legislation in front of its City Council on Sept 22, 2009. With City Manager approval complete, passage is assured.

• The County of Sacramento, the City of Los Angeles and the City of Chicago are exploring the possibility as well.

• BERKELEY: “We feel that the TRACC Ordinance offers a rare opportunity to reduce taxes for both business and employees, encourages our employees to take advantage of transit, reduces air pollution, and shrinks our carbon footprint…”

• SAN FRANCISCO: “While the Chamber generally opposes mandates on business, the city’s newest requirement …can be an economic benefit. In addition to helping to reduce greenhouse gas emissions by getting people out of cars and onto transit, the law can be a money-saver for businesses.”

Response from Chambers of Commerce

We generally do not like ordinances, but we get understand the need for action:

• Climate change, traffic congestion, and the high cost of employees’ commutes are all serious issues.

• This legislation addresses all points above, and with everyone participating, there can be meaningful change.

• This is not an unfunded mandate. Tax savings is key.

• Hence, we support.

Summary of Chamber Sentiment

Saves up to $190 per employee per year in payroll taxes

Creates an excellent employee recruitment and retention tool

Improves employee morale and productivity

Reduces parking lot congestion with more transit/vanpool usage

Helps reduce local traffic congestion and improves air quality

Benefits to EmployersBenefits to Employers

Saves up to $1000 a year in personal income taxes

Creates an incentive to try a more relaxing and economical commute

Using transit or vanpools helps to improve air quality and the general quality of life

Benefits to Employees

Hundreds of employers already participate in __…

[Add additional logos here]

IRS and 132 (f)

-- Very Flexible --

2 Key Points:

- Cannot exceed maximum per month of $230

- No cash reimbursement

Three ways to offer the transit benefit:

A. pre-tax payroll deduction

B. subsidy, in addition to salary

C. a combination of the two

Two ways to set up transit benefit:

A. Do it yourself Less than 100 employees

You have one work site

B. Have someone else do it for you--using a third party

administrator (TPA) Larger companies

Multiple work sites

Option #1: Do it Yourself…

9 steps to setting up your program

#1 Choose the type of program #1 Choose the type of program

Debit Cards -

Transit Passes - Vouchers

#2 Get management approval #2 Get management approval

#3 Identify key personnel #3 Identify key personnel

#4 Create and distribute survey/enrollment form#4 Create and distribute survey/enrollment form

#5 Tabulate surveys

#5 Tabulate surveys

#6 Arrange for payroll to establish a deduction code#6 Arrange for payroll to establish a deduction code

#7 Order passes/vouchers/debit cards#7 Order passes/vouchers/debit cards

#8 Distribute benefit to employees

#8 Distribute benefit to employees

#9 Update your personnel policy handbook#9 Update your personnel policy handbook

Option #2: Have someone else do it for

you

Selecting a Third Party Administrator

#1 Research options #1 Research options

Look online to see who can provide this service; talk with your payroll provider as well

#2 Meet with a representative #2 Meet with a representative Make sure to understand costs, timeframes, and your responsibilities

#3 Sign agreement#3 Sign agreement

Also consider including bicycling—it is now covered

up to $20 a month!

“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