An easy transportation fix? Commuter benefits

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This op-ed appeared in The Boston Business Journal on October 29, 2019.

By Robert Dawson and Mary Connaughton

MassDOT’s recent report, Congestion in the Commonwealth 2019, found what millions of commuters already know: Massachusetts has reached a tipping point. Congestion is no longer just a transportation issue; it has become a quality-of-life and economic problem as well.

There are a number of ways to address the problem, but one approach that has proven successful is to prioritize encouraging employers located close to a mass transit station to provide their employees with an incentive to leave their cars at home.

Since 2013, peak-period travel times have grown. By 6 a.m., a quarter of roadway miles inside the I-95/Route 128 beltway are congested or highly congested, and 17 percent remain so at 10 am. The afternoon rush hour begins by 3 pm, with more than 60 percent of roadway miles congested or highly congested. The most significant congestion increases — 50 percent or more during morning and afternoon peak periods — occurs on Greater Boston roadways. These findings are similar to a 2018 INRIX survey that concluded Boston has the worst peak-commuting gridlock of any major U.S. metropolitan area.

Many of the congestion report recommendations are sound, such as addressing local bottlenecks, better management of state and local roadway operations, creating infrastructure for shared-travel modes, increasing remote work and telecommuting, affordable housing near transit stations and increasing MBTA capacity. These will all take considerable time and, in most cases, require additional financial resources and legislative approval.

So what can employers do? Every Greater Boston business located within half a mile of a transit station should consider offering a commuter-benefits program to its employees. By far the cheapest and easiest option is Perq, the MBTA’s program. It’s currently offered by 1,500 employers and used by more than 130,000 employees. As impressive as these numbers are, too many businesses are missing out on this opportunity.

By offering access to pretax MBTA passes, employers can decrease their payroll tax burden and employees can reduce their state and federal taxable income by up to $140 and $265, respectively. Employees who elect to purchase passes with pretax dollars realize a much greater benefit — an effective discount of up to 30 or even 40 percent. This is an especially enticing option for commuter-rail riders, who can pay upwards of $300 for a monthly pass.

The battle for talent is fierce in this vibrant economy, and a competitive benefits package includes commuter benefits. Commuter-benefits programs have delivered impressive results when they have the passionate support of state government and business leaders. San Francisco’s has resulted in over 4 million fewer annual vehicle trips. Unlike in San Francisco, Perq is not mandated by law, but even a 25 percent increase in use could have a sizable impact on congestion and tailpipe emissions.

The Perq Commuter Benefit Program has a 44-year history of success in Greater Boston. Encouraging all employers near a transit station to enroll can make a meaningful contribution to reducing congestion and improving the environment.

Mary Connaughton directs government transparency at Pioneer Institute, and Robert Dawson, a certified financial planner, contributes research on select topics.