San Francisco treat for commuters
Here’s a question to ponder: Who is smarter -- legislators in San Francisco or Los Angeles?
Read on . . . and perhaps you’ll find an answer.
Late last month, San Francisco supervisors passed a law that requires employers to make mass transit part of an employee’s benefits package. It is called the “commuter benefits ordinance,” and it says employers with 20 or more employees must do one of three things:
1. Allow employees to pay for mass transit on a pretax basis.
2. Provide employees with transportation to and from work.
3. Pay for employees’ transportation to and from work.
You’re probably looking at this and saying that Nos. 2 and 3 are pretty unappetizing if you’re an employer. And you would be right. No. 2 and No. 3 are costly unless you’re a firm like Google, which does provide transportation. But there’s a reason that No. 2 and No. 3 are dogs: The idea is to make choice No. 1 more attractive.
The Internal Revenue Code already allows employees to deduct the cost of mass transit on a pretax basis. The problem is that not many employers provide this benefit.
Here’s how it works:
Let’s say you buy a $62 monthly pass from Metro in Los Angeles County. If you deduct the cost of the pass on a pretax basis, that’s $744 of annual income you don’t have to pay taxes on each year.
To put it another way, if you report $50,000 in annual taxable income to the feds, your tax bill would be lowered by $187 a year.
That’s the equivalent of a $15.59 discount each month on your Metro pass, bringing its cost from $62 to $46.41. Imagine the savings if you ride Metrolink to work every day between L.A. and Anaheim. A monthly pass costs $198.75, or $2,385 annually. In the above scenario, that’s a tax savings of $550 over the course of a year -- dropping the cost of the monthly pass from about $200 to about $150.
Los Angeles City Councilwoman Wendy Greuel met last week with San Francisco Supervisor Ross Mirkarimi, who introduced the law. Will Greuel, who is the chairwoman of the council’s Transportation Committee, introduce similar legislation here?
“We are working on something; once we do have something, you’ll be the first to know,” said Patty Park, a Greuel spokesperson.
This is a law that would seemingly work in any city, although I’m curious to see if business would fight it here. To emphasize the point again, it doesn’t take money out of the pockets of business, although it certainly requires some paperwork.
Maybe there are some real flaws here. But in a time of high gas prices, laws like this seemingly deserve, at the least, a heated discussion among lawmakers.
Sales tax advocate
Political consultant Ace Smith is going to run the campaign this fall for Measure R, the proposed half-cent sales tax that would raise $30 billion to $40 billion for transit and road projects in L.A. County.
Smith has long worked for Mayor Antonio Villaraigosa, who is one of the chief proponents of Measure R and its most visible public face.
He also ran Sen. Hillary Clinton’s presidential campaign in several states, and Smith has long been known for opposition research, something I think is interesting given the fact that three of the five Los Angeles County supervisors (Mike Antonovich, Don Knabe and Gloria Molina) have come out against the sales tax proposal.
Last week, I asked Smith five questions:
1. What will the campaign look like?
“I think the message is very simple,” Smith said. “Here’s an opportunity to create a comprehensive plan to get traffic moving again in Los Angeles County and [Measure R] captures every part of the county. It’s not just a bunch of huge projects.”
2. Has a fundraising committee been formed yet?
Smith said they’re working on it now.
3. Is he waiting until Gov. Schwarzenegger signs the state bill, AB 2321, that would allow the Measure R election to take place on Nov. 4?
Smith said no. They’re working on a campaign now, and he expects the bill will be signed. “That’s a technicality,” he said.
4. What happens if the sales tax in L.A. County and the rest of the state is raised to balance the state budget?
“We’re going forward,” Smith said. “The time has come to do this.”
5. Were his opposition-research skills a factor in his getting the job to run the campaign?
“That is such old news,” Smith said. “If people think that is the only play I’ve got in my playbook. . . . This is about making a case to voters.”
Smith emphasized that Measure R, in addition to several major projects, would return money to cities for smaller tasks such as pothole repair and traffic-light synchronization. It’s very clear that that is going to be a big part of the message the campaign for Measure R will hammer home.
In June, just when gas prices were spiking, the city of Los Angeles closed more than half of the parking lot at the Metrolink station in Northridge for a repaving project. That cost 180 parking spaces, leaving 140 for patrons. City officials told me last week that the work should be done in the next six to eight weeks. As for the other half of the parking lot, you can breathe easy -- the city says it doesn’t have money to repave it.