The New Bay Area Transit 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 CO 2 per gallon.* *Average, US EPA

This equates to roughly 20 pounds of CO 2 each way or 40 pounds round trip. …40 pounds adds up over time…

One day: 40 lbs. of CO 2 not emitted One month: 920 lbs. One year: 11,040 lbs. Taking transit instead:

One employee/year: 11,040 lbs. of CO 2 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 30 th, 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 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, 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 EmployeesParticipantsMonthly DeductionAnnual Average 5,0001,000$100$1,200 PARTICIPANT SAVINGS Federal TaxStateFICA + MedicareAverage Savings 25.00%7.00%7.65%$476 EMPLOYER SAVINGS Pre-Tax DollarsFICAMedicareAnnual Savings $1,200, %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

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!