Explore the Bay Area Monitor

June/July 2016

Benefits Package: Program Eases Commute Expenses and Emissions

The Bay Area Commuter Benefits Program helps workers save on transit costs. Photo by Alec MacDonald.

By Cecily O’Connor

Anyone who’s slogged through Marin County to the Golden Gate Bridge or battled gridlock on the Peninsula’s Highway 101 knows the discomfort of traffic pain and pressure.

But the Bay Area Commuter Benefits Program is showing promise in treating some regional congestion symptoms. That’s because a growing number of employers are registering to offer commuter benefits, which not only ease workers’ monthly transit expenses, but nudge those inclined to drive solo to consider vanpools, biking, or public transit. The program also has potential to save employers money by lowering payroll taxes.

Green-lighted by Senate Bill 1339 (Yee) in 2012, the program has been operating as a pilot under the direction of the Bay Area Air Quality Management District and the Metropolitan Transportation Commission (MTC) from April 2014 to the present.

A total of 3,999 employers had registered with the program through the end of this past April, up 25 percent from September 30, 2014, the deadline by which employers with 50 or more full-time employees working in the nine-county region were required to comply. Collectively, the participating companies employ well over a million people across the region.

Approximately 2,329 employers, or nearly 60 percent, said they had begun offering commuter benefits for the first time. The remainder were offering benefits before the program took effect. Employers must update their registration annually.

“There is room for more growth in the program. But overall, we are happy with where we are right now,” said David Burch, principal environmental planner at the Air District.

Like the Clipper Card and 511.org, commuter benefits represent another investment aimed at improving Bay Area transportation. San Francisco introduced a commuter benefits ordinance in 2009, later followed by Berkeley and Richmond. Success in those cities was a driving force in establishing a regional effort.

Now, newly introduced Senate Bill 1128 (Glazer) seeks to remove the program’s December 31, 2016 sunset date, based on improvements in mobility, air quality, and greenhouse gas emissions realized so far.

“There is no opposition on record and we’re feeling optimistic it will pass the legislature and be signed by the governor,” said Rebecca Long, legislative analyst at MTC.

Carbon dioxide emissions were cut by 35,778 tons during the program’s first year, equal to a reduction of 149 tons per day, according to a February legislative report by MTC and the Air District. About 44,000 workers switched to an “alternative mode” like transit, shuttle, vanpool, or bike, instead of driving alone over the same period. About 28 percent of employees at registered worksites take advantage of commuter benefits provided by their employers on a full- or part-time basis.

“With the level of congestion getting worse in the Bay Area, [commuter benefits have] been beneficial in terms of providing employees options,” said Krute Singa, senior clean transportation program coordinator at the San Francisco Department of the Environment.

Still, there’s work to be done to realize the program’s full impact. It may apply to as many as 6,000 to 7,000 additional employers, according to estimates in the MTC/Air District report. The list is drawn from information compiled by the data analysis firm Dun & Bradstreet and the California Employment Development Department, offering a base to target employers through outreach and education.

Some cities and counties also maintain their own employer lists, so given the variety of sources, businesses can fall through the cracks, several transit officials noted. It’s also likely companies are providing benefits, but haven’t registered.

“It will require continual outreach at the local level to make sure all employers subject to the ordinance are making efforts to be compliant,” said John Ford, executive director at Commute.org, a public agency that provides commute assistance service in San Mateo County. He estimated half of eligible employers there are registered.

The Air District has contacted 9,800 employers so far via phone, e-mail, and multiple direct mailers, said Tom Flannigan, a public information officer with the agency. It has spent $115,000 on radio and television ads, and turned to social media plugs, webinars, tutorials, FAQs, and registration how-to videos as part of a broad-based outreach approach.

If an employer refuses to comply, the Air District can impose a financial penalty as authorized by the California Health and Safety Code. However, most transit officials said they view that tactic as a last resort.

“Our intent is really [employer] compliance assistance,” added the Air District’s Eric Pop. “The first step is to register.”

Then comes explanation of the four options from which employers must choose. The majority, or 82 percent, have picked “Option 1,” which allows workers to deduct transit fares from taxable income. This tends to be easier to administer and saves money, since employers aren’t subject to payroll tax on amounts employees set aside.

Option 2, in which the employer provides a subsidy to offset transit and vanpool fares, has been the second most popular, at 10 percent. About 7 percent offer Option 4, in which employers propose their own alternative commuter benefit program, and 2 percent extend Option 3, which is employer-provided transportation, such as bus service to the worksite or shuttles from a nearby transit station.

The program has been successful in expanding the number of smaller employers who are located outside of central business districts to offer commuter benefits, according to Burch. The Air District hopes this will increase the use of alternative commute modes and reduce emissions on a region-wide basis. For example, 75 percent of participating employers in Napa are offering commuter benefits for the first time, according to the MTC/Air District report.

“A lot of employers are encouraging carpooling in different ways, some with preferential parking,” said Judy Leaks, project manager for the Solano/Napa Commuter Rideshare Program.

Cities, too, are thinking about ways to support workers while planning for possible long-term growth of the Commuter Benefits Program.

San Francisco instituted services like the “Emergency Ride Home” for commuters who take transit or carpools to jobs in the city. When an emergency requires them to leave early or work late, then they can take a taxi, and will be reimbursed up to $150 per trip, for as many as four trips a year.

“This is targeted around drivers to give them a safety net to try a different transit mode,” Singa said.

Cecily O’Connor covers transportation for the Monitor.

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