Afternoon Jolt

Monday Jolt: Transit Edition

The day's winners and losers.

By Afternoon Jolt May 6, 2013


Afternoon Jolt

Today's loser: State workers who ride transit.

Technically, state workers who take the bus to work got good news today, when Gov. Jay Inslee signed legislation allowing state employees to pay for their commute costs with pre-tax income.

However, the bill doesn't distinguish between the cost of a transit pass, which typically costs workers about $25 a month, and the cost of parking, which costs twice as much. The result is that people who choose to drive to work save twice as much off their taxes as people who take the bus, creating a tax incentive to drive—hardly the kind of policy you would expect from the "green" governor.  

Today's winner: State residents who ride transit. 

The US Senate passed legislation today that will (if it's passed by the House) give states and local governments the ability to impose state and local sales taxes on sales over the Internet, with both of Washington state's senators, Maria Cantwell and Patty Murray, voting "aye." Currently, online companies enjoy a tax advantage over brick-and-mortar businesses, which must charge sales tax; the federal legislation would even that playing field. 

So why is this a win for transit? Local transit agencies rely heavily on sales taxes—in King County, for example, sales taxes contribute 54 percent of Metro funding—so a larger sales tax base translates into more funding for transit infrastructure. 

According to estimates from the Washington state Department of Revenue, state and local sales taxes could increase by $845 million in the 2015-2017 biennium if the exemption goes away, including nearly $280 million in local taxes. For cash-strapped systems like Metro, that windfall could mean the difference between systemwide cuts and the first new service in years. 

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